As used in this report, except where the context indicates otherwise, the terms “Moody’s” or the “Company” refer to Moody’s Corporation, a Delaware corporation, and its subsidiaries. The Company’s executive offices are located at 7 World Trade Center at 250 Greenwich Street, New York, NY 10007 and its telephone number is (212) 553-0300.

MA empowers financial services, corporate and public sector customers to anticipate risks, adapt and thrive in a new era of exponential risk. MA's combined data, analytics and cloud-based software tools deliver integrated solutions that help customers to start business relationships, monitor and manage risk, and comply and report based on global laws, rules and regulations.

MA is comprised of: i) a premier fixed income and economic research business (Research & Insights); ii) a data business powered by the world’s largest database on companies and credit (Data & Information); and iii) three cloud-based SaaS businesses serving banking, insurance and KYC workflows (Decision Solutions).

MA creates a holistic view on risk provided by our vast set of proprietary data, analytics, and domain expertise across a range of areas, including credit, companies, properties, securities, people, economies, ESG, climate and more. MA's integrated and technology-enabled solutions provide unique capabilities and insights that are embedded in customer workflows.

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

MIS also ~~earns~~generates revenue from certain non-ratings-related operations, which primarily consist of financial instruments pricing services in the Asia-Pacific region, revenue from ~~ESG research, data~~Second Party Opinions and ~~assessments~~Net Zero Assessments and revenue from ICRA's non-ratings operations. The revenue from these operations is included in the MIS Other LOB and is not material to the results of the MIS segment.

Moody’s manages its business with the goal of delivering value to all of its stakeholders, including its customers, employees, business partners, local communities and stockholders. As part of this effort, Moody’s advances its commitment to sustainability by considering ~~environmental, social, and governance (“ESG”)~~ESG factors ~~throughout~~in its operations, ~~and~~value chain, products and services. It uses its expertise and assets to make a positive difference through technology tools, research and analytical services that help other organizations and the investor community better understand the links between sustainability considerations and the global markets. Moody’s efforts to promote sustainability-related thought leadership, assessments and data to market participants ~~include following the policies of~~involve adhering to globally recognized ~~sustainability organizations that develop~~ standards ~~or frameworks and/or evaluate and assess performance,~~ including the ~~Global Reporting Initiative~~GRI, SASB and ~~Sustainability Accounting Standards Board.~~TCFD recommendations. Moody's ~~also issues an annual report on how~~received the ~~Company has implemented the Task Force on Climate-related Financial Disclosures (“TCFD”) recommendations. Moody’s sustainability-related achievements in 2020 included the following:~~following awards and recognition for its sustainability- related efforts during 2023:

The Board oversees sustainability matters ~~with assistance from~~via the Audit, ~~and~~ Governance & Nominating, and Compensation & Human Resources Committees, as part of its oversight of management and the Company’s overall strategy. The Audit Committee oversees financial, risk and other disclosures made in the Company’s annual and quarterly reports related to sustainability and has overseen the expanded voluntary disclosures the Company has made in its periodic filings. The Governance & Nominating Committee oversees sustainability matters, including significant issues of corporate social and environmental responsibility, as they pertain to the Company’s business and to long-term value creation for the Company and its stockholders, and makes recommendations to the Board regarding these issues. This has helped to develop the Company’s robust ESG strategy. Finally, the Compensation & Human Resources Committee oversees inclusion of sustainability-related performance goals for determining compensation of all senior executives. This oversight has resulted in the Company more fully integrating sustainability-related performance metrics into the strategic & operational compensation metric of all senior executives. The Board also oversees Moody’s policies for assessing and managing the Company's exposure to risk, including climate-related risks such as business continuity disruption and reputational or credibility concerns stemming from incorporation of climate-related risks into the credit methodologies and credit ratings of MIS, or analysis of such risks within MA's products and services.

~~Moody’s purpose is to bring clarity, knowledge and fairness to~~Moody's believes that a workforce representing an interconnected world. The Company’s success in achieving its purpose is only possible through the collective contributions of its global employee population whose members possess the unique combination of skills, professional experience and diversityarray of backgrounds ~~needed to advance the Company’s business~~ and ~~contribute to the communities in which it operates. Moody’s believes that it is essential to: i)~~experiences helps create ~~a workplace where its employees feel valued and inspired; ii) to provide~~ an environment that ~~fosters a culture~~maximizes every employee’s contribution, widens the leadership pipeline and enhances our work, including the quality of ~~independence, inclusion~~our opinions, products and ~~intellectual leadership;~~services.

As of December 31, 2023 and ~~iii) to~~2022, the number of Moody’s employees was as follows:

As a global provider of integrated perspectives on risk, ~~assessment firm,~~ attracting, supporting and retaining skilled talent is essential to the Company’s success. Moody’s addresses these goals by: ~~(i)~~

Moody's believes ~~it is imperative to be visible champions~~that a diverse workforce, comprised of ~~diversity, equity~~individuals with varied thoughts, backgrounds, and ~~inclusion because differing thoughts and perspectives help to enrich the Company’s offerings to its many stakeholders~~experiences, fosters an environment that makes our opinions stronger, our products more innovative, our workplace more welcoming, and improves ~~performance. The key objectives for which the Company focuses with respect~~how we relate and respond to ~~these items include: (i) incorporating~~our customers. We aim to foster a culture of true inclusion and belonging, valuing everyone's unique perspectives and contributions. We believe diversity and equity ~~and~~are essential to build a workplace where inclusion ~~into Moody’s business strategy; (ii) establishing leadership accountability with respect~~thrives. That strategy will guide us as we seek to diversity, including through executive compensation programs; (iii) working to increase diverse representation, e.g., women and ethnic groups; (iv) continuing to advance women and ethnically diverse employees in leadership roles; (v) enhancing employee training in diversity, equity and inclusion matters; (vi) promotingensure equal ~~employment~~ opportunities in all aspects of ~~employment; (vii) designing~~employment.

Our current strategy is rooted in the ~~Company’s compensation practices~~following five focus areas intended to ~~provide equal~~drive meaningful change:

Our Inclusion Operating and Governance Model (OGM) is ~~vital~~the engine that drives inclusion and belonging at Moody’s. By providing a functional framework to ~~attract, support~~guide how our inclusion team, councils, sponsors, BRGs and ~~retain~~committees work together, the OGM focuses our collective efforts to advance our strategic priorities. The Global Inclusion Council, chaired by our CEO and composed of senior leaders who are committed to inclusion and diversity best practices, is charged with the oversight of our global inclusion strategy and its ~~skilled talent.~~progress. The members of the council meet quarterly.

~~Moody’s has numerous diversity programs~~Our governance model also include three Regional Inclusion Councils tasked with overseeing the implementation and ~~eight~~progression of the inclusion strategy within their respective regions. Each council is composed by the BRG regional executives sponsors and also meet on a quarterly basis.

Our operating model includes 11 active ~~business resource groups (“BRGs”), representing 40~~BRGs which represent 53 chapters and are open to all Moody's employees, with more than ~~5,400 memberships~~3,800 employees participating globally as of December 31, ~~2020. An employee can hold membership in multiple BRGs in a single region.~~2023.

The charts below present additional information regarding the ~~diversity~~composition of the Company's workforce as of December 31, ~~2020.~~2023. The percentage for ~~people of color ("POC")~~underrepresented groups includes those who identified as Asian, Hispanic or Latino, Black, American Indian/Alaskan Native, Hawaiian/Other Pacific Island or two or more races. Officers and Managers are calculated using the job categories: executives, senior managers, mid-level managers and first-level managers. The following data is based on Company records and may involve estimates or assumptions.

Additionally, approximately 30% of our Board of Directors identified as female and 30% as members of underrepresented groups.

Moody’s compensation programs are designed to foster and maintain a strong, capable, experienced and motivated global workforce. An important element of the Company’s compensation philosophy is aligning compensation to local market standards so that itMoody's can attract and retain the highly-skilled talent needed to thrive. The Company’s compensation packages include market-competitive salaries, annual bonuses and equity grants for certain employees.

With respect to benefits, the Company views investments in benefits as an investment in its people. Moody’s is committed to providing competitive benefits programs designed to care for all employees and their families. The Company’s comprehensive programs offer resources for physical and mental health that promote preventive care, awareness and support for a healthy lifestyle. Beyond delivering health, welfare, retirement benefits and paid vacation and sick days, Moody’s extends other benefits to support its employees and their families, such as parental leave and educational support.

The Company also promotes ~~financial wellness and provides for~~ flexible work arrangements, which support the Company’s efforts to create a work atmosphere in which people feel valued and inspired to give their best. ~~Beyond delivering health, welfare, retirement benefits, and paid vacation and sick days, Moody’s extends other benefits to support its~~To balance the needs of Moody's employees and ~~their families. To provide competitive benefits,~~business, the Company ~~periodically adjusts the nature~~has implemented a "PurposeFirst" framework, which fosters purpose-driven decisions relating to how and ~~extent of benefits, such as parental leave, workplace flexibility and educational support.~~where Moody's teams work.

~~Management monitors employee turnover rates as presented in the chart below:~~

The Company measures employee engagement via multiple channels, including a BES for employees to provide anonymous and candid feedback to management. This periodic survey helps Moody's management understand our employees’ level of engagement in critical areas, which include, but are not limited to: company strategy; opportunities for employee development; and work/life balance. Managers are accountable for identifying opportunity areas and taking targeted actions based on survey results. The feedback received through the BES is used as ~~well as compliance training.~~a vital input into making decisions to improve employee experience and retention.

Management monitors employee turnover rates as presented in the chart below:

The decrease in the Company's voluntary turnover rates in 2023 compared to 2022 is likely due to the overall strength of the global labor market for much of 2022, especially for technology-related jobs, and a decline in that trend for 2023. The Company's involuntary turnover rates in 2023 remained steady when compared to 2022, with both years including the impacts of the 2022-2023 Geolocation Restructuring Program, which resulted in a reduction in staff, including the relocation of certain job functions during both years.

Climate change is a defining issue of our time, and while Moody’s has a limited direct environmental impact, we do nonetheless have an important role to play in demonstrating proactive corporate responsibility and best practices when it comes to climate change mitigation. As such, the Company is taking steps to achieve its commitment to net-zero emissions across its operations and value chain by 2040 by publishing its TCFD report on an annual basis, issuing its decarbonization plan and taking actions to achieve its near and long-term net-zero targets.

Our decarbonization plan outlines tangible strategies for realizing its climate ambitions, including the procurement of 100% of renewable electricity in the Company’s office spaces and optimizing efficiencies in its operations through its hybrid work program. The costs associated with the implementation of the decarbonization plan are not expected to be material.

Moody’s has made acquisitions, including RMS, which expand its climate data and analytics capabilities. The Company is taking steps to integrate these capabilities into existing offerings to provide its analysts and researchers with streamlined access to consistent and high-quality climate insights.

Moody’s ~~corporate mission~~ is a global integrated risk assessment firm that empowers organizations to ~~provide trusted~~anticipate, adapt and thrive in a new era of exponential risk. Our data, analytical solutions and insights ~~and standards that~~ help decision-makers ~~act~~identify opportunities and manage the risks of doing business with ~~confidence. Moody’s will continue to invest with intent to defend and enhance its core businesses and expand into strategic adjacencies and new geographies.~~others.

Moody’s invests in initiatives to implement the Company’s strategy, including ~~internally led~~internally-led organic development and targeted acquisitions. Illustrative examples include:

In this era of exponential risk, we know that risks are interconnected, and organizations want a complete view of risk. This includes having a greater breadth and depth of understanding around how risks connect.

20 ~~MOODY'S~~ ~~2020 10-K~~

Moody’s believes that the overall long-term outlook remains favorable for continued growth from the offerings of ~~the global fixed-income market and related financial information market, which includes information such as credit opinions, research, data, analytics, risk management tools and related services.~~both of our reportable segments.

Moody’s growth is influenced by a number of trends that impact financial information markets including:

~~Environmental, Social~~Over the last decade, Moody’s has leveraged the power of AI and ~~Governance Data and Solutions~~

Moody’s operations are subject to various risks, as more fully described in Part I, Item 1A “Risk Factors,” inherent in conducting business on a global basis. ~~Such~~

MA provides insights on the evolving risks ~~include currency fluctuations~~of our customers and ~~possible nationalization, expropriation, exchange~~supports their ability to capitalize on related opportunities. Growth in MA is likely to be driven by landing new customers and ~~price controls, changes~~expanding customer relationships across use cases over time. Our trusted and curated data is key in an environment that is increasingly using Gen AI, and we expect that the ~~availability~~integration of our platforms will enable effective cross-selling of models, data ~~from public sector sources, limits on providing information~~and applications. MA's growth is also likely to be driven by quickly addressing new use cases and incorporating new risk data and analytics as needed.

Customers need to understand a large range of interconnected and emerging risks. Our comprehensive solutions support the transformation underway across ~~borders and other restrictive governmental actions.~~various industries due to:

Strong secular trends should continue to provide long-term growth opportunities in MIS. Key growth drivers include:

In addition to the factors noted above, growth in global fixed income markets in a given year is dependent on many macroeconomic and capital market factors including:

Rating fees paid by debt issuers account for most of the revenue of MIS. Therefore, a substantial portion of MIS’s revenue is dependent upon the dollar-equivalent volume and number of ratable debt securities issued in the global capital markets.

MA competes broadly in the ~~world’s capital markets is the disintermediation~~financial information and enterprise risk software industries against various diversified competitors. MA’s main competitors within DS are providers of software and analytic solutions. In R&I, MA faces competition from providers of economic data, financial ~~systems. Issuers increasingly raise capital in the global public capital markets, in addition to, or in substitution for, traditional~~research and analysis. MA's main competitors within D&I are providers of commercial and financial intermediaries. Moreover, financial intermediaries have sold assets in the global public capital markets, in addition to, or instead of, retaining those assets. Moody’s believes that issuer use of global debt capital markets offer advantages in capacity and efficiency compared to traditional banking systems and that the trend of increased disintermediation will continue. Further, disintermediation has continued because of the historically low interest rate environment and bank deleveraging, which has encouraged a number of corporations and other entities to seek alternative funding in the bond markets.

MIS competes with other CRAs and with investment banks and brokerage firms that offer credit opinions and research. Many users of MIS’s ratings also have in-house credit research capabilities. There are also some rating markets, based on industry, geography and/or instrument type, in which Moody’s has made investments and obtained market positions superior to its competitors, while in other markets, the reverse is true.

MIS, certain of the Company's ~~ratings~~credit rating affiliates, and many of the issuers and/or securities that ~~it rates~~MIS and the affiliates rate, are subject to extensive regulation in the U.S.~~, EU and in other countries~~ (including by state and local authorities)., EU and in other countries. In addition, some of the services offered by MA and its affiliates are subject to regulation in ~~countries such as Canada, China and Australia.~~a number of countries. MA also derives a significant amount of its sales from banks and other financial services providers who are subject to regulatory oversight and who are required to conduct due diligence and pass through certain regulatory requirements to key suppliers such as ~~MA.~~MA by contract. Existing and proposed laws and regulations can impact the Company’s operations, products and the markets in which the Company operates. Additional laws and regulations have been proposed or are being considered. Each of the existing, adopted, proposed and potential laws and regulations can increase the costs and legal risk associated with the Company’s operations, including the issuance of credit ratings, and may negatively impact the Company’s profitability and ability to compete, or result in changes in the demand for ~~credit ratings,~~the Company's products and services, in the manner in which ~~credit ratings~~the Company's products and services are utilized, and in the manner in which the Company operates.

24 ~~MOODY'S~~ ~~2020 10-K~~

In the EU, the CRA industry is registered and supervised through a pan-EU regulatory framework. ~~The European Securities and Markets Authority (ESMA)~~ESMA has direct supervisory responsibility for registered CRAs throughout the ~~EU MIS’~~EU. MIS’s EU CRA subsidiaries are registered with and are subject to CRA regulation in the EU and periodic inspection by ESMA.

As part of the legislative package on sustainable finance, in June 2023, the European Commission published a proposal on the transparency and integrity of ESG rating activities, which would subject ESG rating and/or score providers to formal regulation and periodic inspection. Applicable rules include, but are not limited to, procedural requirements with respect to use of credit ratings, independence and avoidance of conflicts of interest, conflicts of interest concerning investments in CRAs, methodologies, models and key rating assumptions, CRA rotation and use of multiple CRAs, outsourcing, disclosures, credit ratings of sovereign issuers, liability for intentional or grossly negligent failure to abidesupervision by ~~applicable regulations, reporting requirements to ESMA regarding fees, and additional procedural and substantive requirements on~~ESMA. Following negotiations between the ~~pricing of services. From time to time, ESMA publishes interpretive guidance, or thematic reports regarding various aspects~~Council of the ~~CRA regulation~~European Union and annually, sets out its work program for the forthcoming year. ESMA’s 2021 work program includes monitoring, identifying and assessing new risks such as those emanating from COVID-19 and ESG data and rating providers, assessing the drivers behind changes to credit rating methodologies, engaging with CRAs on IT and information security controls and ensuring that credit ratings are accessible and usable by investors.

In December 2022, the EU adopted DORA, which ~~may include~~will apply from early 2025. As a ~~timeline for the adoption~~credit rating agency, MIS is in scope of ~~legislative proposals regarding~~DORA, and accordingly, is required to undertake certain steps to ensure that its oversight and risk management of its information technology, including any functions outsourced to third-parties that provide information communication technologies, is resilient. MA provides certain products and services to clients that may be regulated financial institutions in the ~~ESG sector. The Commission~~EU and therefore fall in the scope of DORA. It is ~~also~~therefore expected that MA may receive queries from such clients in relation to ~~publish a report in 2021 on CRAs and the integration of sustainability factors into their credit ratings. The Commission may also seek to introduce a regulatory framework that may impact Moody’s ESG~~those products and ~~services.~~services, as well as requests for contractual commitments, to ensure their compliance with DORA.

~~Separately,~~In the U.K. ~~left the EU on January 31, 2020 and commenced the Brexit implementation period ending on December 31, 2020. After the Brexit implementation period, the~~, MIS U.K. ~~registered CRA ceased to be~~is registered with and regulated by ~~ESMA and became subject~~the FCA. In March 2023, the FCA initiated a review of competition in the markets for certain types of wholesale market data. Credit rating data is included as one element of the FCA’s review. In August 2023, the FCA published an update, determining that its findings did not require a referral to ~~regulation by~~ the U.K. ~~Financial Conduct~~Competition & Markets Authority. ~~Regulatory arrangements were put~~However, the FCA also stated that it would continue its analysis and would announce any potential remedies in ~~place by~~its final report due on or before March 1, 2024.

Additionally, HM Treasury published a consultation in March 2023 on whether regulation for providers of ESG ratings should be introduced, on the ~~relevant authorities in both~~potential scope of a regulatory regime. It is unclear if and when the U.K. ~~and the EU~~Government might seek to allow credit ratings to be available for regulatory use in both the EU and the U.K. after the end of the Brexit implementation period. MIS has put arrangements in place to endorse its U.K. credit ratings into the EU and its EU credit ratings into the U.K. These arrangements are independent of the EU-U.K. Trade and Cooperation Agreement (“TCA”) that now governs the trading relationship between the EU and the U.K., subject to relevant ratification arrangements by each party.

Moody’s and its affiliates own and control a variety of intellectual property, including but not limited to:

Management of Moody’s believes that ~~each of~~ the trademarks and related corporate names, marks and logos relating to its businesses, including those containing the term “Moody’s”, are of material importance to the Company.

The Company, primarily through MA and its ~~subsidiaries,~~affiliates, licenses certain of its databases, SaaS and other software applications, credit risk models, training courses in credit risk and capital markets, research and other publications and services that contain intellectual property to its customers. In addition, the Company, primarily through Vigeo Eiris and Four Twenty Seven and their respective subsidiaries, licenses certain databases, software applications, assessments, research and other publications and services ~~relating to ESG and climate risks~~ that contain intellectual property to its customers. These licenses are provided pursuant to standard agreements containing customary restrictions and intellectual property protections.

In addition, Moody’s licenses from third parties certain technology, data and other intellectual property rights. Specifically, Moody’s obtains licenses from third parties to use financial information (such as market and index data, financial statement data, research data, default data and security identifiers) as well as software development tools and libraries. In addition, certain of the Company’s ~~Bureau van Dijk and RDC businesses~~affiliates obtain from ~~third party~~third-party information providers certain financial, credit risk, compliance, firmographic, management, ownership, news and/or other data worldwide, which ~~Bureau van Dijk and RDC distribute~~are distributed through ~~its company~~Moody's information products. The Company obtains such technology and intellectual property rights from generally available commercial sources. The Company also utilizes generally available ~~open source~~open-source software and libraries for internal use and subject to appropriately permissive ~~open source~~open-source licenses, to carry out routine functions in certain of the Company’s software products. Most of such technology and intellectual property is available from a variety of sources. Although certain financial information (particularly security identifiers, certain pricing or index data, and ~~certain~~ company financial data in selected geographic markets) is available from a limited number of sources, Moody’s does not believe it is dependent on any one data source for a material aspect of its business.

The names of Moody’s products and services referred to herein are trademarks, service marks or registered trademarks or service marks owned by or licensed to Moody’s or one or more of its affiliates. The Company owns ~~thirty eight patents.~~patents (including granted, allowed and pending patents). None of the Company's intellectual property is subject to a specific expiration date, except to the extent that the patents and the copyright in items that the Company creates (such as credit reports, research, software, and other written opinions) expire pursuant to relevant law.

The Company considers its intellectual property to be proprietary, and Moody’s relies on a combination of copyright, trademark, trade secret, patent, non-disclosure and other contractual and technological safeguards for protection. Moody’s also pursues instances of third-party infringement of its intellectual property in order to protect the Company’s rights.

Moody’s investor relations internet website is ~~http:~~https://ir.moodys.com/. Under the “SEC Filings” tab at this website, the Company makes available free of charge its annual reports on Form 10-K, proxy and other information statements, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after they are filed with, or furnished to, the SEC.

The SEC maintains an internet site that contains annual, quarterly and current reports, proxy and other information statements that the Company files electronically with the SEC. The SEC’s internet site is ~~http:~~https://www.sec.gov/.

Please carefully consider the following discussion of significant factors, events and uncertainties that make an investment in the Company’s securities risky and provide important information for the understanding of the “forward-looking” statements discussed in Item 7 of this Form 10-K and elsewhere. These risk factors should be read in conjunction with the other information in this annual report on Form 10-K.

The events and consequences discussed in these risk factors could, in circumstances the Company may not be able to accurately predict, recognize, or control, have a material adverse effect on Moody’s business, financial condition, operating results (including components of the Company’s financial results such as sales and profits), cash flows and stock price. These risk factors do not identify all risks that Moody’s faces. The Company could also be affected by factors, events, or uncertainties that are not presently known to the Company or that the Company currently does not consider to present significant risks. In addition to the effects of general economic conditions, including inflation and related monetary policy actions in response to inflation, changes in international conditions, including the ~~COVID-19 pandemic~~impact of ongoing or new developments in the Russia-Ukraine military conflict and the military conflict in Israel and surrounding areas, and resulting global disruptions on our business and operations discussed in Item 7 of this Form 10-K and in the risk factors below, additional or unforeseen effects from the ~~COVID-19 pandemic and the~~ global economic climate may give rise to or amplify many of these risks discussed below.

Moody’s operates in a highly regulated industry and is subject to extensive regulation by federal, state and local authorities in the U.S., including the Reform Act and the ~~Financial Reform~~Dodd-Frank Act. These regulations are complex, continually evolving and have tended to become more stringent over time. Additionally, ~~the change in the Presidential administration and~~ changes in Congress may increase the uncertainty with regard to potential changes in these laws and regulations and the enforcement of any new or existing legislation or directives by government authorities. See “Regulation” in Part 1,I, Item 1 of this annual report on Form 10-K for more information. The current laws and regulations:

It is difficult to accurately assess the future impact of legislative and regulatory requirements on Moody’s business and its customers’ businesses. For example, new laws and regulations may affect MIS’s communications with issuers as part of the rating assignment process, alter the manner in which MIS’s credit ratings are developed, assigned and communicated, affect the manner in which MIS or its customers or users of credit ratings operate, impact the demand for MIS’s credit ratings and alter the economics of the credit ratings business, including by restricting or mandating business models for CRAs. Further, speculation concerning the impact of legislative and regulatory initiatives and the increased uncertainty over potential liability and adverse legal or judicial determinations may negatively affect Moody’s stock price. Although these legislative and regulatory initiatives apply to CRAs and credit markets generally, they may affect Moody’s in a disproportionate manner. Each of these developments increase the costs and legal risk associated with the issuance of credit ratings and can have a material adverse effect on Moody’s operations, profitability and competitiveness, the demand for credit ratings and the manner in which such ratings are utilized.

In addition, MA derives a significant amount of its sales from banks and other financial services providers who are subject to regulatory oversight. U.S. banking regulators, including the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System and the Consumer Financial Protection ~~Board,~~Bureau, as well as many state agencies, have issued guidance to insured depository institutions and other providers of financial services on assessing and managing risks associated with third-party relationships, which include all business arrangements between a financial services provider and another entity, by contract or otherwise, and generally requires banks and financial services providers to exercise comprehensive oversight throughout each phase of a bank or financial service provider’s business arrangement with third-party service providers, and instructs banks and financial service providers to adopt risk management processes commensurate with the level of risk and complexity of their third-party relationships. In light of this, MA’s existing or potential bank and financial services customers subject to this guidance have sought to and may further revise their third-party risk management policies and processes and the terms on which they do business with MA. This can result in delayed or reduced sales to such customers, adversely affect MA’s relationship with such customers, increase the costs of doing business with such customers and/or result in MA assuming greater financial and legal risk under ~~service~~its agreements with such customers.

Future regulations could also affect products and services the Company offers ~~in the ESG sector (including those offered by Moody’s ESG Solutions Group).~~that incorporate or are based on artificial intelligence technologies.

~~Additionally, as~~As part of the ~~date~~legislative package on sustainable finance, in June 2023, the European Commission published a proposal on the transparency and integrity of ESG rating activities. The Council of the ~~filing of this annual report on Form 10-K, there remains uncertainty regarding the impact that Brexit will have~~European Union, in December 2023, agreed its position on the ~~credit~~draft regulation, which would subject ESG rating ~~industry within~~and/or score providers to formal regulation and supervision by ESMA. The draft regulation is now set for negotiations between the ~~U.K., the EU~~European Council and ~~other jurisdictions. The U.K. left the EU on January 31, 2020, thereby entering an 11-month implementation period. The Brexit implementation period ended on December 31, 2020.~~ Parliament and is expected to be adopted in 2024.

In February 2022, the FCA published a portfolio letter on its CRA supervision strategy. Among other things, the FCA explained that it takes a holistic approach to supervising CRAs. This means that if a CRA or the group to which it belongs also carries on unregulated activities (for example, ESG ratings), the FCA may assess these unregulated activities as part of its supervision of regulated activities. CRAs need to be able to demonstrate that they have considered, and are ~~expected to agree by~~actively managing, potential risks from any unregulated activities. The FCA also identified its supervisory priorities for CRAs, which consist of: ratings process and methodologies; governance and oversight; market and perimeter risks; and operational resilience and resourcing.

In March ~~2021 to~~2023, the FCA initiated a ~~memorandum~~review of ~~understanding establishing~~competition in the ~~framework~~markets for ~~structured regulatory cooperation on financial services. The contents and extent~~certain types of wholesale market data. Credit rating data is included as one element of the ~~memorandum~~FCA’s review. In August 2023, the FCA published an update, determining that its findings did not require a referral to the U.K. Competition & Markets Authority. However, the FCA also stated that it would continue its analysis and announce any potential remedies in its final report due on or before March 1, 2024.

Additionally, HM Treasury published a consultation in March 2023 proposing to make firms providing ESG ratings and/or scores to U.K. users (both from the U.K. and abroad) subject to FCA supervision. The proposals mirror the IOSCO recommendations on ESG ratings and data products providers. It is unclear if and when the U.K. Government might seek to move forward legislation to enable the FCA to supervise such firms. The U.K. is also currently ~~unclear,~~developing a voluntary industry-led Code of Conduct for ESG ratings and ~~therefore~~data providers.

The precise scope and impact of the regulatory developments related to ESG in Europe remain unclear; however, the Company continues to assess the potential impact on ~~Moody’s customers~~both MA and ~~other stakeholders is currently uncertain.~~MIS.

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

With respect to MA, regulators in Europe and other foreign markets in which MA is active have issued guidance similar to that issued in the U.S. relating to financial institutions’ assessment and management of risks associated with third-party relationships. In light of this, MA’s existing or potential bank and financial services customers subject to this guidance have sought and may further revise their third-party risk management policies and processes and the terms on which they do business with MA. This can result in delayed or reduced sales to such customers, adversely affect MA’s relationship with such customers, increase the costs of doing business with such customers and/or result in MA assuming greater financial and legal risk under ~~service~~its agreements with such customers.

Although Moody’s will monitor developments related to financial reforms outside the U.S. affecting the credit rating industry and Moody’s customers, Moody’s cannot predict the extent of such future laws and regulations, and the effect that they will have on Moody’s business or the potential for increased exposure to liability could be significant. For example, compliance with the EU, U.K. and other foreign regulations may increase costs of operations and could have a significant negative effect on Moody’s operations, profitability or ability to compete, or the markets for its products and services, including in ways that Moody’s presently is unable to predict. In addition, exposure to increased liability under the EU, U.K. regulations and regulations of other foreign jurisdictions may further increase costs and legal risks associated with the issuance of credit ratings and materially and adversely impact Moody’s results of operations. Financial reforms in the EU, U.K. and other foreign jurisdictions may have a material adverse effect on Moody’s business, operating results and financial condition.

Moody’s faces exposure to litigation and government and regulatory proceedings, investigations and inquiries related to MIS’s ratings actions, as well as other business practices and products within both MIS and MA. IfWhen the market value of credit-dependent instruments ~~declines~~has declined or defaults have occurred, whether as a result of difficult economic times, turbulent markets or otherwise, the number of investigations and legal proceedings that Moody’s ~~faces could increase~~has faced has increased significantly. Parties who invest in securities rated by MIS ~~may pursue~~have pursued claims against MIS or Moody’s for losses they ~~face~~faced in their portfolios. For instance,

Moody’s faced numerous class action lawsuits and other litigation, government investigations and inquiries concerning events linked to the U.S. subprime residential mortgage sector and broader deterioration in the credit markets during the financial crisis of 2007-2008. Evolving expectations on ESG disclosures and reporting could also result in increased regulatory scrutiny and new regulatory actions at a corporate and business unit level. MA’s offering of products and services relating to sanctions, KYC and financial crime may result in increased regulatory scrutiny and could expose the Company to increased risk of litigation from data subjects and other third-parties. Additionally, as Moody’s develops its Gen AI product offerings and/or its uses of Gen AI, the Company may face increased regulatory scrutiny and exposure to increased litigation. Legal proceedings and regulatory inquiries and investigations impose additional expenses on the Company and require the attention of senior management to an extent that may significantly reduce their ability to devote time to addressing other business issues, and any of these proceedings, investigations or inquiries could ultimately result in adverse judgments, damages, fines, penalties or activity restrictions. Risks relating to legal proceedings are heightened in foreign jurisdictions that lack the legal protections or liability standards comparable to those that exist in the U.S. In addition, new laws and regulations have been and may continue to be enacted that establish lower liability standards, shift the burden of proof or relax pleading requirements, thereby increasing the risk of successful litigations in the U.S. and in foreign jurisdictions. These litigation risks are often difficult to assess or quantify. Moody’s may not have adequate insurance or reserves to cover these risks, and the existence and magnitude of these risks often remains unknown for substantial periods of time. Furthermore, when Moody’s is unable to achieve dismissals at an early stage and litigation matters proceed to trial, the aggregate legal defense costs incurred by Moody’s increase substantially, as does the risk of an adverse outcome.

Moody’s operates in a number of countries, and as a result the Company is required to comply with and quickly adapt ~~with~~to numerous international and U.S. federal, state and local laws and regulations. The Company’s ability to comply with applicable laws and regulations, including anti-corruption, antitrust and securities trading laws, the Reform Act, the Dodd-Frank Act and regulations thereunder, is largely dependent on its establishment and maintenance of compliance, review and reporting systems, as well as its ability to attract and retain qualified compliance and risk management personnel. Moody’s policies and procedures to identify, evaluate and manage the Company’s risks, including risks resulting from acquisitions, may not be fully effective, and Moody’s employees or agents may engage in misconduct, fraud or other errors. It is not always possible to deter such errors, and the precautions the Company takes to prevent and detect this activity may not be effective in all cases. If Moody’s employees violate its policies or if the Company’s risk management methods are not effective, the Company may be subject to criminal and civil liability, the suspension of the Company’s employees, fines, penalties, regulatory sanctions, injunctive relief, exclusion from certain markets or other penalties, and may suffer harm to its reputation, financial condition and operating results.

Moody’s considers many aspects of its products and services to be proprietary. Failure to protect the Company’s intellectual property adequately could harm its reputation and affect the Company’s ability to compete effectively. Businesses the Company acquires also involve intellectual property portfolios, which increase the challenges the Company faces in protecting its strategic advantage. In addition, the Company’s operating results can be adversely affected by inadequate or changing legal and technological protections for intellectual property and proprietary rights in some jurisdictions and ~~markets.~~markets, including if and how rights in these markets evolve to address advances in LLMs and Gen AI. The lack of strong legal and technological intellectual property protections in foreign jurisdictions in which we operate may increase our vulnerability and may pose risks to our business. From time to time, laws are passed that require publication of certain information, in some cases at no cost, that the Company considers to be its intellectual property and that it currently sells or licenses for a fee, which could result in lost revenue.

Unauthorized third parties may also try to obtain and use technology or other information that the Company regards as proprietary. It is also possible that Moody’s competitors or other entities could obtain patents related to the types of products and services that Moody’s offers, and attempt to require Moody’s to stop developing or marketing the products or services, to modify or redesign the products or services to avoid infringing, or to obtain licenses from the holders of the patents in order to continue developing and marketing the products and services. Even if Moody’s attempts to assert or protect its intellectual property rights through litigation, it may require considerable cost, time and resources to do so, and there is no guarantee that the Company will be successful. The Company’s ability to establish, maintain and protect its intellectual property and proprietary rights against theft, misappropriation or infringement could be materially and adversely affected by insufficient and/or changing proprietary rights and intellectual property legal protections in some jurisdictions and markets. These risks, and the cost, time and resources needed to address them, may increase as the Company’s business grows and its profile rises in countries with intellectual property regimes that are less protective than the rules and regulations applied in the United States.

As a global company, Moody’s is subject to taxation in the United States and various other countries and jurisdictions. As a result, our effective tax rate is determined based on the taxable income and applicable tax rates in the various jurisdictions in which the Company operates. Moody’s future tax rates could be affected by changes in the composition of earnings in countries or states with

differing tax rates or other factors, including by increased earnings in jurisdictions where Moody’s faces higher tax rates, losses incurred in jurisdictions for which Moody’s is not able to realize the related tax benefit, or changes in foreign currency exchange rates. Changes in the tax, accounting and other laws, treaties, regulations, policies and administrative practices, or changes to their interpretation or enforcement, including changes applicable to multinational corporations such as the Base Erosion Profit Shifting ~~initiative~~and the global minimum tax rate initiatives being ~~conducted~~led by the ~~Organization for Economic Co-operation and Development,~~OECD, which requires companies to disclose more information to tax authorities on operations around the world, and the ~~European Union’s~~EU’s state aid rulings, could have a material adverse effect on the Company’s effective tax rate, results of operations and financial condition and may lead to greater audit scrutiny of profits earned in various countries.

32 ~~MOODY'S~~ ~~2020 10-K~~

During 2023, multiple foreign jurisdictions in which the Company operates have enacted legislation to adopt a minimum tax rate described in the GloBE or Pillar Two, tax model rules 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 will be due to bring the jurisdictional effective tax rate up to 15%. While the Pillar Two minimum tax requirement is not currently anticipated to have a material impact on the Company’s results of operations or financial position, management is evaluating and will continue to monitor the potential impact of the Pillar Two global minimum tax proposals on our consolidated financial statements and related disclosures.

Moody’s conducts operations in various countries outside the U.S. and derives a significant portion of its revenue from foreign sources. Changes in the economic condition of the various foreign economies in which the Company operates have an impact on the Company’s business. For example, economic uncertainty in the Eurozone or elsewhere, including, but not limited to, in Latin America, China or ~~China,~~the Middle East, affects the number of securities offerings undertaken within those particular areas. In addition to the risks addressed elsewhere in this section, operations abroad expose Moody’s to a number of legal, economic and regulatory risks such as:

Additionally, Moody’s is subject to complex U.S., foreign and other local laws and regulations that are applicable to its operations abroad, such as laws and regulations governing economic and trade sanctions, tariffs, embargoes, and anticorruption ~~laws~~ including the Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act of 2010 and other similar local laws. The internal controls, policies and procedures and employee training and compliance programs to deter prohibited practices the Company has implemented may not be effective in preventing employees, contractors or agents from violating or circumventing such internal policies or from material violations of applicable laws and regulations. Any determination or allegations, even if unfounded, that the Company has violated sanctions, anti-bribery or anti-corruption laws could have a material adverse effect on Moody’s business, operating results and financial condition. Compliance with international and U.S. laws and regulations that apply to the Company’s international operations increases the cost of doing business in foreign jurisdictions. Violations of such laws and regulations may result in severe fines and penalties, criminal sanctions, administrative remedies and restrictions on business conduct and could have a material adverse effect on Moody’s reputation, its ability to attract and retain employees, its business, operating results and financial condition.

Moody’s ability to conduct business may be materially and adversely impacted by a disruption in the infrastructure that supports its businesses and the communities in which Moody’s is located, ~~including~~including: (i) New York City, the location of Moody’s headquarters, (ii) major cities worldwide in which Moody’s has offices, (iii) locations that may be affected by the Russia-Ukraine military conflict and the military conflict in Israel and surrounding areas; and (iv) locations in China used for certain Moody’s work. This may include a disruption involving physical or technological infrastructure (whether or not controlled by the Company), including the Company’s electronic delivery systems, the Company's data center facilities, or the Internet, used by the Company or third parties with or through whom Moody’s conducts business. Many of the Company’s products and services are delivered electronically and the Company’s customers depend on the Company’s ability to receive, store, process, transmit and otherwise rapidly handle very substantial quantities of data and transactions on computer-based networks. Some of Moody’s operations require complex processes and the Company’s extensive controls to reduce the risk of error inherent in our operations cannot eliminate such risk completely. To the extent the Company grows through acquisitions, newly acquired businesses may not have invested in technological infrastructure and disaster recovery to the same extent as Moody's has. As their systems are integrated into Moody's, a vulnerability could be introduced, which could impact platforms across the Company. The Company’s customers also depend on the continued capacity, reliability and security of the Company’s telecommunications, data centers, networks and other electronic delivery systems, including its websites and connections to the Internet. The Company’s employees also depend on these systems for internal use. Any significant failure, compromise, cyber-breach, interruption or a significant slowdown of operations of the Company’s infrastructure, whether due to human error, capacity constraints, hardware failure or defect, weather (including climate change), natural disasters, fire, power loss, telecommunication failures, break-ins, sabotage, intentional acts of vandalism, acts of terrorism, political unrest, pandemic, ~~(including the COVID-19 pandemic),~~ war or otherwise, may impair the Company’s ability to deliver its products and services.

Moody’s efforts to secure and plan for potential disruptions of its major operating systems may not be successful. The Company relies on third-party providers, including, increasingly, cloud-based service providers, to provide certain essential services. While the Company believes that such providers are reliable, the Company has limited control over the performance of such providers. To the extent any of the Company’s third-party providers ceases to provide these services in an efficient, cost-effective manner or fails to adequately expand its services to meet the Company’s needs and the needs of the Company’s customers, ~~(including as a result of the COVID-19 pandemic),~~ the Company could experience lower revenues and higher costs. Additionally, although the Company maintains processes to prevent, detect and recover from a disruption, the Company also does not have fully redundant systems for most of its smaller office locations and low-risk systems, and its disaster recovery plan does not include restoration of non-essential services. If a disruption occurs in one of Moody’s locations or systems and its personnel in those locations or those who rely on such systems are unable to utilize other systems or communicate with or travel to other locations, such persons’ ability to service and interact with Moody’s customers will suffer. The Company cannot predict with certainty all of the adverse effects that could result from the Company’s failure, or the failure of a third party, to efficiently address and resolve these delays and interruptions. A disruption to Moody’s operations or infrastructure may have a material adverse effect on its reputation, business, operating results and financial condition.

Moody’s business is impacted by general economic conditions and volatility in ~~the U.S. and~~ world financial markets. Furthermore, issuers of debt securities ~~may elect~~have increasingly elected to issue securities without ratings or securities which are rated or evaluated by non-traditional parties such as financial advisors, rather than traditional CRAs, such as MIS. Companies are also increasingly accessing alternative sources of financing, such as loans and debt financing from non-bank lenders that do not involve a CRA-issued credit rating. A majority of Moody’s credit-rating-based revenue is transaction-based, and therefore it is especially dependent on the number and dollar volume of debt securities issued in the capital markets. Market disruptions and economic slowdown and uncertainty have in the past, and may in the future, negatively impacted the volume of debt securities issued in global capital markets and the demand for credit ratings. Changes to U.S. tax laws and policy can negatively affect the volume of debt securities issued in the U.S. For example, the Tax Act limits deductibility on interest payments and significantly reduces the tax cost associated with the repatriation of cash held outside the U.S., both of which could negatively affect the volume of debt securities issued. Conditions that reduce issuers’ ability or willingness to issue debt securities, such as market volatility, declining growth, currency devaluations, changes in laws (including tax-related laws) or other adverse economic trends, reduce the number and dollar-equivalent volume of debt issuances for which ~~Moody’s~~MIS provides ratings services and thereby adversely affect the fees Moody’s earns in its ratings business.

~~Economic~~Current market, economic and government factors are negatively impacting the volume of debt securities issued in global capital markets and the demand for credit ratings, which is materially and adversely affecting the Company’s business, operating results and financial condition. These factors include increases in or uncertainty around interest rates (as well as related monetary policy by governments in the response to factors such as ~~a long-term continuation of difficult economic conditions,~~inflation), the ~~scaling back, wind-down or termination~~withdrawal of COVID-19 economic stimulus, ~~and support programs, and current uncertainty~~inflationary pressures, increases or volatility in ~~various other jurisdictions, may have an adverse impact on the Company’s business. Future debt issuances also could be negatively affected by increases in interest~~mortgage rates, widening credit spreads, regulatory and political developments (including uncertainty in various jurisdictions where Moody's operates), difficult economic conditions, growth in the use of alternative sources of credit, and defaults by significant issuers. ~~Declines~~Further declines or other changes in the markets for debt securities may materially and adversely affect the Company’s business, operating results, financial condition, cash flows and ~~financial condition.~~prospects.

Moody’s initiatives to reduce costs to counteract a decline in its business, including the 2022 - 2023 Geolocation Restructuring Program, may not be ~~sufficient and cost~~sufficient. Cost reductions, including those associated with this program, may be difficult or impossible to obtain in the short term, due in part to rent, technology, compliance, compensation and other fixed costs associated with some of the Company’s operations as well as the need to monitor outstanding ratings. Further, cost-reduction initiatives, including those under-taken to date, could make it difficult for the Company to rapidly expand operations in order to accommodate any unexpected increase in the demand for ratings. ~~Volatility~~Further volatility in the financial markets, including ~~changes~~continued decreases in the volumes of debt securities and ~~changes~~increases in interest rates, may have a material adverse effect on the business, operating results and financial condition, which the Company may not be able to successfully offset with cost reductions.

There is price competition in the credit rating, research, and credit risk management markets, as well as in the market for research, business intelligence and analytical services offered by MA. Moody’s faces competition globally from other CRAs and from investment banks and brokerage firms that offer credit opinions in research, as well as from in-house research operations. Competition for customers and market share has spurred more aggressive tactics by some competitors in areas such as pricing and services, as well as increased competition from non-NRSROs that evaluate debt risk for issuers or ~~investors.~~investors, and the emergence of LLMs, Gen AI and other technologies may further intensify these pressures. At the same time, a challenging business environment and consolidation among both competitors and customers, particularly those involved in structured finance products and commercial real estate, and other factors affecting demand may enhance the market power of competitors and reduce the Company’s customer base. ~~Weak~~Recent weak economic growth ~~intensifies~~has intensified competitive pricing pressures, ~~and can~~which may result in customers’ use of free or lower-cost information that is increasingly becoming available from alternative sources or their development of alternative, proprietary systems for assessing credit risk that replace the products currently purchased from Moody’s. While Moody’s seeks to compete primarily on the basis of the quality of its products and services, it can lose market share when its pricing is not sufficiently competitive. In addition, the Reform Act was designed to encourage competition among rating agencies. The formation of additional NRSROs may increase pricing and competitive pressures. Furthermore, in some of the countries in which Moody’s operates, governments may provide financial or other support to local rating agencies. Any inability of Moody’s to compete successfully with respect to the pricing of its products and services will have a material adverse impact on its business, operating results and financial condition.

Moody’s reputation and the strength of its brand are key competitive strengths. To the extent that the rating agency business as a whole or ~~Moody’s,~~Moody's, relative to its competitors, suffers a loss in credibility, Moody’s business will be significantly impacted. Factors that may have already affected credibility and could potentially continue to have an impact in this regard include the appearance of a conflict of interest, the performance of securities relative to the rating assigned to such securities, the timing and nature of changes in ratings, a major compliance failure, negative perceptions or publicity and increased criticism by users of ratings, regulators and legislative bodies, including as to the ratings process, ~~including as to~~or the Company’s recent ESG initiatives and our incorporation of climate- and other ESG- related risks in the Company's rating process, and its implementation with respect to one or more securities and intentional, poor representation of our products and services by our partners or agents, manipulation of our products and services by third parties, or unintentional misrepresentations of Moody’s products and services in advertising materials, public relations information, social media or other external communications. Operational errors, or errors in software or data, whether by Moody’s or a Moody’s competitor, could also harm the reputation of the Company or the ~~credit rating industry.~~industries in which the Company operates. Additionally, as Moody's develops its Gen AI product offerings, the Company may incur risks or challenges in its adoption that could lead to reputational harm. Damage to reputation and credibility could have a material adverse impact on Moody’s business, operating results and financial condition, as well as on the Company’s ability to find suitable candidates for acquisition.

~~The increase~~Growth in global revenue reflected ~~growth~~increases in both ~~reportable segments.~~MA and MIS, both in the U.S. and internationally. Refer to the section entitled “Segment Results” of this MD&A for a more fulsome discussion of the Company’s segment revenue.

The increase in depreciation and amortization expense is driven by amortization of internally developed software, which is primarily related to the development of MA SaaS solutions.

The restructuring charge ~~of $50 million~~ in ~~2020 primarily~~both periods relates ~~to:~~

The gain in the prior year relates to the early redemption of a portion of the 2.55% 2020 Senior Notes, Due 2060.

The decrease in the ETR is primarily ~~due~~reflects the resolutions of UTPs in various U.S. and non-U.S. tax jurisdictions in the first quarter of 2023, which resulted in a decrease to ~~a deferred tax benefit resulting from a non-U.S. corporate reorganization.~~the provision for income taxes of $113 million.

The 10% increase in global MA revenue reflects growth both in the U.S. (9%) and internationally (12%) across all LOBs.

Global DS revenue grew 11% and reflects increases in both the U.S. (11%) and internationally (11%).

The most notable drivers of the growth reflect:

Global R&I revenue increased 9% compared to 2022 and reflects growth in both the U.S. (4%) and internationally (15%).

The most notable drivers of growth reflect:

Global D&I revenue increased 11% compared to 2022 and reflects growth in both the U.S. (12%) and internationally (10%), mainly driven by:

The modest Adjusted Operating Margin expansion for MA is primarily due to the 10% increase in global MA revenue, offset by a 10% increase in operating and SG&A expenses.

The increase in depreciation and amortization expense primarily reflects higher amortization of internally developed software relating to the development of SaaS-based solutions.

The restructuring charges in both periods relate to the Company's 2022 - 2023 Geolocation Restructuring Program as more fully discussed in Note 11 to the consolidated financial statements.

The following chart presents changes in rated issuance volumes compared to 2022. To the extent that changes in rated issuance volumes had a material impact to MIS's revenue compared to the prior year, those impacts are discussed below.

The ~~increase~~growth in CFG revenue ~~of 24%~~ reflected ~~growth~~increases in both in the ~~U.S. (33%~~U.S (14%) and internationally ~~(7%~~(3%)~~, which resulted in a $344~~.

Transaction revenue increased $115 million ~~increase in transaction revenue. The~~compared to the prior year, with the most notable drivers ~~of the CFG revenue growth were:~~reflecting:

Global SFG revenue for the years ended December 31, ~~2020~~2023 and ~~2019~~2022 was comprised as follows:

The decrease in SFG revenue of ~~15%~~12% reflected declines in both in the U.S. ~~(21%~~(18%) and internationally ~~(6%~~(1%). Transaction revenue decreased $72 million compared to 2022.

~~declined $71 million.~~ The ~~most notable factors contributing to the~~ decline in SFG revenue ~~were:~~

Global FIG revenue for the years ended December 31, ~~2020~~2023 and ~~2019~~2022 was comprised as follows:

The ~~11%~~ increase in FIG revenue ~~was mainly due to:~~of 11% reflected growth in both the U.S. (13%) and internationally (9%) which resulted in a $43 million increase in transaction revenue compared to 2022.

The most notable drivers of the increase reflected:

Global PPIF revenue for the years ended December 31, ~~2020~~2023 and ~~2019~~2022 was comprised as follows:

The ~~11%~~10% increase in PPIF revenue reflected growth in both the U.S. (10%) and internationally (12%), which resulted ~~primarily from:~~in an increase in transaction revenue of $38 million compared to 2022.

The most notable drivers of the growth were:

The restructuring charges in both ~~years~~periods relate to the Company's ~~restructuring programs, which are more fully discussed in Note 11 to the consolidated financial statements.~~

Moody’s maintains a presence in more than 40 countries. In ~~2020,~~2023, approximately ~~42%~~41% of the Company’s revenue and approximately ~~39%~~38% of the ~~Company~~Company's expenses were denominated in functional currencies other than the U.S. dollar, principally in the British pound and the euro. As such, the Company is exposed to market risk from changes in FX rates. As of December 31, ~~2020,~~2023, approximately ~~61%~~52% of Moody’s assets were located outside the U.S., making the Company susceptible to fluctuations in FX rates. The effects of translating assets and liabilities of non-U.S. operations with non-U.S. functional currencies to the U.S. dollar are charged or credited to OCI.

The change in fair value of the foreign exchange forward contracts would be offset by FX revaluation gains or losses on underlying assets and liabilities denominated in currencies other than a subsidiary’s functional currency.

As of December 31, ~~2020,~~2023, the Company had ~~the following derivative instruments~~cross-currency swaps designated as hedges of euro denominated net investments in ~~subsidiaries:~~

If the euro were to strengthen 10% relative to the U.S. dollar, there would be an approximate ~~$313~~$321 million unfavorable impact to the fair value of the cross-currency swaps ~~and forward contracts recognized in OCI, which would be offset by favorable currency translation gains on the Company’s euro net investment in foreign subsidiaries.~~

As of December 31, ~~2020,~~2023, the Company has designated €500 million of the 2015 Senior Notes and €750 million of the 2019 Senior Notes as a net investment hedge to mitigate FX exposure relating to euro denominated net investments in subsidiaries. If the euro were to strengthen 10% relative to the U.S. dollar, there would be an approximate ~~$153~~$138 million unfavorable adjustment to OCI related to ~~this~~these net investment ~~hedge.~~hedges. This adjustment would be offset by favorable translation adjustments on the Company’s euro net investment in subsidiaries.

The Company’s interest rate risk management objectives are to reduce the funding cost and volatility to the Company and to alter the interest rate exposure to ~~the~~a desired risk profile. Moody’s uses interest rate swaps as deemed necessary to assist in accomplishing these objectives. The Company is exposed to interest rate risk on its various outstanding fixed-rate debt for which the fair value of the outstanding fixed rate debt fluctuates based on changes in interest rates. 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 ~~3-month and 6-month LIBOR.~~SOFR. These swaps are adjusted to fair market value based on prevailing interest rates at the end of each reporting period and fluctuations are recorded as a reduction or addition to the carrying value of the borrowing, while net interest payments are recorded as interest expense/income in the Company’s consolidated statement of operations. A hypothetical change of 100 BPS in the ~~LIBOR-based~~SOFR-based swap rate would result in an approximate ~~$52~~$275 million change to the fair value of the ~~swap,~~swaps, which would be offset by the change in fair value of the hedged item.

Additional information on these interest rate swaps is disclosed in Note 7 to the consolidated financial statements located in Item 8 of this Form 10-K.

Moody’s cash equivalents consist of investments in high-quality investment-grade securities within and outside the U.S. with maturities of three months or less when purchased. The Company manages its credit risk exposure by allocating its cash equivalents among various money market ~~mutual funds, money market~~ deposit accounts and certificates of deposit ~~and issuers of high-grade commercial paper~~ and by limiting the amount it can invest with any single issuer. Short-term investments primarily consist of certificates of deposit.

64 ~~MOODY'S~~ ~~2020 10-K~~

The Company is currently financing its operations, capital expenditures, acquisitions and share repurchases from operating and financing cash flows.

Net cash flows from operating activities increased ~~$471~~by $677 million compared to the prior year, ~~reflecting:~~

Additionally, the increase in operating cash flow reflects:

The ~~$1,113~~$15 million ~~increase~~decrease in cash flows used in investing activities compared to ~~2019~~2022 primarily reflects:

The ~~$1,212~~$376 million ~~decrease~~increase in cash used in financing activities was primarily attributed to:

The Company’s aggregate cash and cash equivalents and short-term investments of ~~$2.7~~$2.2 billion at December 31, ~~2020~~2023 included approximately ~~$1.5~~$1.7 billion located outside of the U.S. Approximately ~~14%~~43% of the Company’s aggregate cash and cash equivalents and short-term investments is denominated in ~~euros~~EUR and ~~British pounds.~~GBP. The Company manages both its U.S. and non-U.S. cash flow to maintain sufficient liquidity in all regions to effectively meet its operating needs.

As a result of the Tax Act, all previously net undistributed foreign earnings have now been subject to U.S. tax. The Company continues to evaluate which entities it will indefinitely reinvest earnings outside the U.S. The Company has provided deferred taxes for those entities whose earnings are not considered indefinitely reinvested. Accordingly, the Company ~~has commenced repatriating~~continues to repatriate a portion of its non-U.S. cash in these subsidiaries and will continue to repatriate certain of its offshore cash in a manner that addresses compliance with local statutory requirements, sufficient offshore working capital and any other factors that may be relevant in certain jurisdictions. Notwithstanding the Tax Act, which generally eliminated federal income tax on future cash repatriation to the U.S., cash repatriation may be subject to state and local taxes or withholding or similar taxes.

The ~~Company believes that it has the financial resources needed to meet its~~Company's material cash requirements and expects to have positive operating cash flow in 2021. Cash requirements for periods beyond the next twelve months will depend, among other things, on the Company’s profitability and its ability to manage working capital requirements. The Company may also borrow from various sources.

The repayment schedule for the Company’s borrowings outstanding at December 31, ~~2020~~2023 is as follows:

Future interest payments and fees associated with the Company's debt and credit facility are expected to be $5.0 billion, of which approximately $300 million is expected to be paid in each of the next five years, and the remaining amount expected to be paid thereafter. For additional information on the Company's outstanding debt, CP program and 2021 Facility, refer to Note 18 to the consolidated financial statements.

Management may consider pursuing additional long-term financing when it is appropriate in light of cash requirements for operations, share repurchases and other strategic opportunities, which ~~would~~could result in higher financing costs.

On February 5, 2024, the Board approved the declaration of a quarterly dividend of $0.85 per share for Moody’s common stock, payable March 15, 2024 to shareholders of record at the close of business on February 23, 2024. The ~~table above does not include~~continued payment of dividends at this rate, or at all, is subject to the discretion of the Board.

On February 7, 2022, the Board approved $750 million in share repurchase authority. At December 31, 2023, the Company had approximately $359 million of remaining authority. On February 5, 2024, the Board of Directors authorized an additional $1 billion in share repurchase authority. There is no established expiration date for the remaining authorizations.

As more fully discussed in Note 11 to the consolidated financial statements, the Company has substantially completed the 2022 - 2023 Geolocation Restructuring Program. Future cash outlays associated with this program, which will consist of personnel-related costs, are expected to be $36 million, substantially all of which are expected to be paid through 2024.

The Company believes that it has the financial resources needed to meet its cash requirements and expects to have positive operating cash flow in 2024. Cash requirements for periods beyond the next twelve months will depend, among other things, on the Company’s ~~net long-term tax liabilities of $483 million relating~~profitability and its ability to UTPs, since the expected cash outflow of such amounts by period cannot be reasonably estimated. Additionally, the table above does not include approximately $33 million relating to indemnification liability resultingmanage working capital requirements. The Company may also borrow from ~~the divestiture of MAKS and approximately $18 million relating to the remaining unpaid deemed repatriation liability resulting from the Tax Act enacted into law in the U.S. in December 2017.~~various sources as described above.

In addition to its reported results, Moody’s has included in this MD&A certain adjusted results that the SEC defines as ~~“non-GAAP~~“Non-GAAP financial measures.” Management believes that such adjusted financial measures, when read in conjunction with the Company’s reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s performance, facilitate comparisons to competitors’ operating results and can provide greater transparency to investors of supplemental information used by management in its financial and operational decision-making. These adjusted measures, as defined by the Company, are not necessarily comparable to similarly defined measures of other companies. Furthermore, these adjusted measures should not be viewed in isolation or used as a substitute for other GAAP measures in assessing the operating performance or cash flows of the Company. Below are brief descriptions of the Company’s adjusted financial measures accompanied by a reconciliation of the adjusted measure to its most directly comparable GAAP ~~measure:~~measure.

The Company presents Adjusted Operating Income and Adjusted Operating Margin because management deems these metrics to be useful measures to provide additional perspective on ~~the~~Moody's operating ~~performance of Moody’s.~~performance. Adjusted Operating Income excludes the impact of: i) ~~restructuring; ii)~~ depreciation and amortization; ~~iii) Acquisition-Related Expenses; iv) loss pursuant to the divestiture~~and ii) restructuring charges/adjustments. Depreciation and amortization are excluded because companies utilize productive assets of ~~MAKS;~~different useful lives and ~~v) a captive insurance company settlement.~~use different methods of acquiring and depreciating productive assets. Restructuring ~~charges~~charges/adjustments are excluded as the frequency and magnitude of these charges may vary widely across periods and companies. Depreciation and amortization are excluded because companies utilize productive assets of different estimated useful lives and use different methods of acquiring and depreciating productive assets. Acquisition-Related Expenses consist of expenses incurred to complete and integrate the acquisition of Bureau van Dijk. These expenses were excluded in the prior years due to the material nature of the cumulative costs incurred over the multi-year integration effort. Acquisition-related expenses from other acquisitions were not material. The loss pursuant to the divestiture of MAKS is excluded as the frequency and magnitude of divestiture activity may vary widely from period to period and across companies. The captive insurance company settlement relates to the resolution of a matter that is not expected to recur in the future at this magnitude.

Management believes that the exclusion of the aforementioned items, as detailed in the reconciliation below, allows for an additional perspective on the Company’s operating results from period to period and across companies. The Company defines Adjusted Operating Margin as Adjusted Operating Income divided by revenue.

The Company presents Adjusted Net Income and Adjusted Diluted EPS because management deems these metrics to be useful measures to provide additional perspective on ~~the~~Moody's operating ~~performance of Moody’s.~~performance. Adjusted Net Income and Adjusted Diluted EPS exclude the impact of: i) ~~Acquisition-Related Expenses; ii)~~ amortization of acquired intangible assets; ~~iii)~~ii) restructuring charges/adjustments; iii) a gain on the extinguishment of debt; and iv) ~~loss and a tax charge pursuant~~FX translation losses reclassified to earnings resulting from the divestiture of MAKS; and v) a captive insurance company settlement. Acquisition-Related Expenses consist of expenses incurred to complete and integrate the acquisition of Bureau van Dijk. These expenses were excludedCompany no longer conducting commercial operations in ~~prior years due to the material nature of the cumulative costs incurred over the multi-year integration effort. Acquisition-related expenses from other acquisitions were not material.~~ Russia.

The Company excludes the impact of amortization of acquired intangible assets as companies utilize intangible assets with different estimated useful lives and have different methods of acquiring and amortizing intangible assets. These intangible assets were recorded as part of acquisition accounting and contribute to revenue generation. The amortization of intangible assets related to acquisitions will recur in future periods until such intangible assets have been fully amortized. Furthermore, the timing and magnitude of business combination transactions are not predictable and the purchase price allocated to amortizable intangible assets and the related amortization period are unique to each acquisition and can vary significantly from period to period and across companies. Restructuring ~~charges~~charges/adjustments, the gain on extinguishment of debt, and FX translation losses reclassified to earnings resulting from the Company no longer conducting commercial operations in Russia are excluded as the frequency and magnitude of these ~~charges~~items may vary widely across periods and companies. The loss and tax charge pursuant to the divestiture of MAKS are excluded as the frequency and magnitude of divestiture activity may vary widely from period to period and across companies. The captive insurance company settlement relates to the resolution of a matter that is not expected to recur in the future at this magnitude.

The Company excludes the aforementioned items to provide additional perspective when comparing net income and diluted EPS from period to period and across companies as the frequency and magnitude of similar transactions may vary widely across periods.

Note: the tax impacts in the table above were calculated using tax rates in effect in the jurisdiction for which the item relates.

The Company calculates ARR by taking the total recurring contract value for each active renewable contract as of the reporting date, divided by the number of days in the contract and multiplied by 365 days to ~~be a useful measure which provides~~create an annualized value. The Company defines renewable contracts as subscriptions, term licenses, maintenance and renewable services. ARR excludes transaction sales including training, one-time services and perpetual licenses. In order to compare period-over-period ARR excluding the effects of foreign currency translation, the Company bases the calculation on currency rates utilized in its current year operating budget and holds these FX rates constant for the duration of all current and prior periods being reported. Additionally, ARR excludes contracts related to acquisitions to provide additional perspective in assessing ~~the revenue~~ growth excluding the ~~inorganic revenue~~ impacts from certain ~~acquisitions~~acquisition activity.

The Company’s definition of ARR may differ from definitions utilized by other companies reporting similarly named measures, and ~~divestiture activity. The following table details the periods excluded from each acquisition/divestiture~~this metric should be viewed in addition to, ~~determine organic revenue.~~and not as a substitute for, financial measures presented in accordance with GAAP.

Refer to Note 2 to the consolidated financial statements located in Part II, Item 8 on this Form 10-K for a discussion on the impact to the Company relating to recently issued accounting pronouncements.

Legal proceedings in which the Company is involved also may impact Moody’s liquidity or operating results. No assurance can be provided as to the outcome of such proceedings. In addition, litigation inherently involves significant costs. For information regarding legal proceedings, see Part II, Item 8 – “Financial ~~Statements”,~~Statements,” Note 21 “Contingencies” in this Form 10-K.

Those factors, risks and uncertainties include, but are not limited ~~to,~~ to:

These factors, risks and uncertainties as well as other risks and uncertainties that could cause Moody’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements are ~~currently, or in the future could be, amplified by the COVID-19 outbreak, and are~~ described in greater detail under “Risk Factors” in Part I, Item 1A of ~~the Company’s~~Moody’s annual report on Form 10-K for the year ended December 31, ~~2020,~~2023, and in other filings made by the Company from time to time with the SEC or in materials incorporated herein or therein. Stockholders and investors are cautioned that the occurrence of any of these factors, risks and uncertainties may cause the Company’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements, which could have a material and adverse effect on the Company’s business, results of operations and financial condition. New factors may emerge from time to time, and it is not possible for the Company to predict new factors, nor can the

Company assess the potential effect of any new factors on it.

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

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

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

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

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

Management of the Company evaluated and assessed the design and operational effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2020~~2023 based on criteria established in the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on the assessment performed, management has concluded that Moody’s maintained effective internal control over financial reporting as of December 31, ~~2020.~~2023.

The effectiveness of our internal control over financial reporting as of December 31, ~~2020~~2023 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their accompanying report which expresses an unqualified opinion on the effectiveness of Moody's internal control over financial reporting as of December 31, ~~2020.~~2023.

/s/ ROBERT FAUBER

/s/ ~~MARK KAYE~~CAROLINE SULLIVAN

February ~~19, 2021~~14, 2024

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

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

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

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

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

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

MOODY’S CORPORATION

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. Revenue is primarily derived from the originators and issuers of such transactions who use MIS ratings to support the distribution of their debt issues to investors. Additionally, MIS earns revenue from certain non-ratings-related operations, which consist primarily of financial instrument pricing services in the Asia-Pacific region, revenue from providing ESG research, data and assessments and revenue from ICRA’s non-ratings operations. The revenue from these operations is included in the MIS Other LOB and is not material to the results of the MIS segment.

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

OnIn January ~~1, 2019,~~2021, the ~~Company adopted~~FASB issued ASU ~~No. 2016-02, “Leases (Topic 842)~~2021-01, “Reference Rate Reform - Scope,” which clarified the scope and ~~elected to apply the provisions~~application of the New Lease Accounting Standard on the date of adoption with adjustments to the assets and liabilities on its opening balance sheet, with no cumulative-effect adjustment to the opening balance of retained earnings required. Accordingly, the Company did not restate prior year comparative periods for the impact of the New Lease Accounting Standard.

84 ~~MOODY'S~~ ~~2020 10-K~~

In the ~~potential near-term or longer-term impact that the COVID-19 crisis may have on its financial position and operating results due to numerous uncertainties regarding the duration and severity~~second quarter of ~~the crisis, including the length of time to distribute a vaccine. As a result, it is reasonably possible that~~2023, the Company ~~could experience material impacts including, but not limited to: reductions in~~expanded its disaggregation of revenue disclosures for MA's Decision Solutions LOB to enhance insight and cash flows; additional credit losses related to accounts receivables; asset impairment charges; and changes in the funded status of defined benefit pension plans. While it is reasonably possible that the COVID-19 crisis could impact the results of operations and cash flows oftransparency into this business. In conjunction with this new presentation, the Company inreclassified certain immaterial revenue relating to structured finance solutions from the ~~near term, Moody's believes that it has adequate liquidity~~Decision Solutions LOB to ~~maintain its operations with minimal disruption and~~the Research & Insights LOB.

Prior year revenue by LOB disclosures have been reclassified to ~~maintain compliance with its debt covenants.~~

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

Cash equivalents principally consist of investments in money market ~~mutual funds~~deposit accounts and money market ~~deposit accounts~~funds as well as ~~high-grade commercial paper and~~ certificates of deposit with maturities of three months or less when purchased.

Short-term investments are securities with maturities greater than 90 days at the time of purchase that are available for operations in the next 12 months. The Company’s short-term investments primarily consist of certificates of deposit and their cost

approximates fair value due to the short-term nature of the instruments. Interest and dividends on these investments are recorded into income when earned.

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

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

~~MOODY'S~~ ~~2020 10-K 85~~

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

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

The Company evaluates its reporting units on an annual basis, or more frequently if there are changes in the reporting structure of the Company due to acquisitions, ~~reporting unit~~ realignments or if there are indicators of potential impairment. For the reporting units where the Company is consistently able to conclude that no impairment exists using only a qualitative approach, the Company’s accounting policy is to perform the second step of the aforementioned goodwill impairment assessment at least once every three years. Goodwill is assigned to a reporting unit at the date when an acquisition is integrated into one of the established reporting units, and is based on which reporting unit is expected to benefit from the synergies of the acquisition.

For purposes of assessing the recoverability of goodwill, the Company has ~~7 primary~~four reporting units: 2two reporting units within MA consisting of businesses that offer: i) data and data-driven analytical solutions; and ii) risk-management software, workflow and CRE solutions and two within the Company’s ratings business (one for the ICRA business and one that encompasses all of Moody’s other ratings operations) ~~and 5 reporting units within MA: Content, ERS, MALS, Bureau van Dijk and Reis.~~.

Long-lived assets (including ROU Assets) and amortizable intangible assets are reviewed for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Costs incurred to obtain customer contracts, such as sales commissions, are deferred and recorded within other current assets and other assets when such costs are determined to be incremental to obtaining a contract, would not have been incurred otherwise and the Company expects to recover those costs. These costs are amortized to expense on a systematic basis consistent with the transfer of the products or services to the customer. Depending on the line of business to which the contract relates, this may be based upon the average economic life of the products sold or average period for which services are provided, inclusive of anticipated contract renewals. Determining the estimated economic life of the products sold requires judgment with respect to anticipated future technological changes. The Company had a balance of $180 million and $159 million in such deferred costs as of December 31, 2020 and December 31, 2019, respectively, and recognized $59 million, $53 million and $38 million of related amortization during the years ended December 31, 2020, December 31, 2019 and December 31, 2018, respectively, which is included within SG&A expenses in the consolidated statement of operations. Costs ~~incurred~~ to obtain customer contracts are only incurred in the MA segment.

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

The Company capitalizes ~~work-in-process~~royalty costs for in-progress MIS ratings, which is recognized consistent with the rendering of the related services to the customers, as ratings are issued. The Company had a balance of $12 million and $11 million in such deferred costs as of December 31, 2020 and December 31, 2019, respectively, and recognized $47 million, $42 million and $40 million of amortization of the costs during the years ended December 31, 2020, December 31, 2019 and December 31, 2018, respectively, which is included within operating expenses in the consolidated statement of operations.

In addition, the Company ~~had a balance of $35 million and $40 million in such deferred~~capitalizes work-in-process costs as of December 31, 2020 and December 31, 2019, respectively, and recognized $66 million, $56 million and $54 million of related amortization during the years ended December 31, 2020, December 31, 2019 and December 31, 2018, respectively,for in-progress MIS ratings, which is ~~included within operating expenses in~~recognized consistent with the ~~consolidated statement~~rendering of ~~operations.~~the related services to the customers, as ratings are issued.

In order to determine an estimate of expected credit losses, receivables are segmented based on similar risk characteristics including historical credit loss patterns ~~and industry or class of customers~~ to calculate reserve rates. The Company uses an aging method for developing its allowance for credit losses by which receivable balances are stratified based on aging category. A reserve rate is calculated for each aging category which is generally based on historical information, and is adjusted, when necessary, for current conditions (e.g., macroeconomic or industry related) and reasonable and supportable forecasts about the future. The Company also considers customer specific information (e.g., bankruptcy or financial difficulty) when estimating its expected credit losses, as well as the economic environment of the customers, both from an industry and geographic perspective, in evaluating the need for allowances. Expected credit losses are reflected as additions to the accounts receivable allowance. Actual uncollectible account write-offs are recorded against the allowance.

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

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

ROU Assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU Assets and lease liabilities are recognized at the lease

commencement date based on the present value of lease payments over the lease term. As substantially all of the Company’s leases do not provide an implicit interest rate, the Company uses its estimated secured incremental borrowing rates at the lease commencement date in determining the present value of lease payments. These secured incremental borrowing rates are attributable to the currency in which the lease is denominated.

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

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

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

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

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

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

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.

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

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

For all operations outside the U.S. where the Company has designated the local currency as the functional currency, assets and liabilities are translated into U.S. dollars using end of year exchange rates, and revenue and expenses are translated using

average exchange rates for the year. For these foreign operations, currency translation adjustments are recorded to other comprehensive income.

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

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

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

On December 22, 2017, the Tax Act was signed into law, resulting in all previously undistributed foreign earnings being subject to U.S. tax. The Company has provided deferred taxes for those entities whose earnings are not considered indefinitely reinvested.

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

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

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

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

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

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

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

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

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

~~The~~For cash and cash equivalents, short-term investments and derivatives, the Company manages its credit ~~risk~~ exposure by ~~allocating its cash~~limiting the amount of counterparty risk with any particular financial institution; limits are assigned to each counterparty based on perceived quality of credit and are monitored daily. Cash equivalents are held among various money market ~~mutual funds,~~deposit accounts, money market ~~deposit accounts,~~

funds, and certificates of deposits as of December 31, 2023 and ~~high-grade commercial paper.~~2022. Short-term investments primarily consist of certificates of deposit as of December 31, ~~2020~~2023 and ~~2019. The Company manages its credit risk exposure on cash equivalents~~2022. Derivatives primarily consist of foreign exchange forwards or swap contracts (interest rate swaps and ~~short-term investments by limiting the amount it can invest with any single entity. NaN~~cross-currency swaps) as of December 31, 2023 and 2022. For trade receivables, no customer accounted for 10% or more of accounts receivable at December 31, ~~2020~~2023 or ~~2019.~~2022.

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

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

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

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

In ~~April 2019,~~November 2023, the FASB issued ASU ~~No. 2019-04, “Codification~~2023-07, "Segment Reporting (Topic 280): Improvements to ~~Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 Financial Instruments”. This~~ Reportable Segment Disclosures" ("ASU ~~clarifies and improves guidance related~~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 ~~recently issued standards updates~~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 ~~credit losses, hedging,~~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 ~~recognition~~assets must be provided on an interim basis in addition to disclosure of significant segment expenses and ~~measurement of financial instruments.~~other segment items. This ASU is effective for fiscal years beginning after December 15, ~~2020, with early adoption permitted. The Company does not anticipate that the adoption of this ASU will have a significant impact on its consolidated financial statements.~~

In ~~January 2021,~~December 2023, the FASB issued ASU ~~2021-01, “Reference Rate Reform - Scope,”~~2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU No. 2023-09"), which ~~clarified~~is intended to enhance the ~~scope~~transparency and ~~application~~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 ~~original guidance,~~entity's ETR reconciliation and income taxes paid by jurisdiction disclosures. This ASU ~~No. 2020-04, "Facilitation~~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 ~~the Effects of Reference Rate Reform~~adopting this ASU on ~~Financial Reporting" ("ASU No. 2020-04"), issued in March 2020. ASU No. 2020-04 provides temporary optional expedients~~its consolidated financial statements and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. Both ASU's were effective upon issuance, and the Company may elect to apply the amendments prospectively through December 31, 2022 as the transition from LIBOR is completed.disclosures.

At December 31, 2020 and December 31, 2019, accounts receivable included approximately $361 million and $346 million, respectively, of unbilled receivables related to the MIS segment. Certain MIS arrangements contain contractual terms whereby the customers are billed in arrears for annual monitoring services and rating fees, requiring revenue to be accrued as an unbilled receivable as such services are provided.

The following table presents the Company's unbilled receivables, which are included within accounts receivable, net, at December 31, ~~2020~~2023 and December 31, ~~2019, accounts receivable included approximately $98 million and $53 million, respectively, of unbilled receivables related to the MA segment.~~2022:

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.

For the MA segment, for the year ended December 31, ~~2018,~~2021, the increase in the deferred revenue balance was primarily due to acquisitions and organic ~~growth and the Reis acquisition in the fourth quarter of 2018.~~growth.

Remaining performance obligations in the MIS segment largely reflect deferred revenue related to monitoring fees for certain structured finance products, primarily CMBS, where the issuers can elect to pay the monitoring fees for the life of the security in advance. As of December 31, ~~2020,~~2023, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately ~~$130~~$91 million. The Company expects to recognize into revenue approximately ~~20%~~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.

Amortization of costs incurred to obtain customer contracts is included within SG&A expenses in the consolidated statements of operations. Costs incurred to obtain customer contracts are only in the MA ~~segment include both amounts recorded as deferred revenue on~~segment.

Amortization of costs to fulfill customer contracts is included within operating expenses in the ~~balance sheet as~~consolidated statements of December 31, 2020 as well as amounts not yet invoiced to customers as of December 31, 2020 largely reflecting future revenue related to signed multi-year arrangements for hosted and installed subscription-based products. As of December 31, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $2.2 billion. The Company expects to recognize into revenue approximately 65% of this balance within one year, approximately 20% of this balance between one to two years and the remaining amount thereafter.operations.

Year Ended December 31,
2020 2019 2018
Basic 187.6 189.3 191.6
Dilutive effect of shares issuable under stock-based compensation plans 1.7 2.3 2.8
Diluted 189.3 191.6 194.4
Antidilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above 0.2 0.2 0.4

On ~~February 20, 2019,~~March 1, 2022, the Company entered into an ASR agreement with a financial institution counterparty to repurchase $500 million of its outstanding common stock. The Company paid $500 million to the counterparty and received an initial delivery of ~~2.2~~1.2 million shares of its common stock. Final settlement of the ASR agreement was completed onin April ~~26, 2019~~2022 and the Company received delivery of an additional ~~0.6~~0.3 million shares of the Company’s common stock.

~~MOODY'S~~ ~~2020 10-K 97~~

In addition, the Company is invested in ~~Corporate-Owned Life Insurance (COLI) in the first quarter of 2020.~~COLI. As of December 31, ~~2020,~~2023 and December 31, 2022, the contract value of the COLI was ~~$17 million.~~$47 million and $40 million, respectively.

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 the aforementioned financial exposures that occur in the normal course of business. The Company does not hold or issue derivatives for speculative purposes.

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 ~~3-month and 6-month LIBOR.~~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 ~~statement~~statements of operations.

Refer to Note 18 for information on the cumulative amount of fair value hedging adjustments included in the carrying amount of the above hedged items.

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.

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 of the ASC.~~815. Accordingly, changes in the fair value of these contracts are recognized immediately in other non-operating ~~(expense)~~ 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 ~~February 2021.~~August 2024.

December 31, 2020 December 31, 2019
Notional Amount of Currency Pair: Sell Buy Sell Buy
Contracts to sell USD for GBP $ 295 £ 222 $ 235 £ 178
Contracts to sell USD for Japanese Yen $ 15 ¥ 1,600 $ 29 ¥ 3,200
Contracts to sell USD for Canadian dollars $ 107 C$ 140 $ 83 C$ 110
Contracts to sell USD for Singapore dollars $ 59 S$ 79 $ 41 S$ 56
Contracts to sell USD for Euros $ 447 € 376 $ 421 € 378
Contracts to sell Euros for GBP € 135 £ 121 € 25 £ 21
Contracts to sell USD for Russian Ruble $ 13 ₽ 1,000 $ — ₽ —
Contracts to sell USD for Indian Rupee $ 18 ₹ 1,350 $ — ₹ —

Beginning in the second quarter of 2023, the Company 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 notional amount of the total return swaps as of December 31, 2023 was $58 million.

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

December 31,
2020 2019
Office and computer equipment (3 - 10 year estimated useful life) $ 260 $ 221
Office furniture and fixtures (3 - 10 year estimated useful life) 49 51
Internal-use computer software (1 - 10 year estimated useful life) 666 619
Leasehold improvements and building (1 - 21 year estimated useful life) 231 240
Total property and equipment, at cost 1,206 1,131
Less: accumulated depreciation and amortization (928) (839)
Total property and equipment, net $ 278 $ 292

On a weighted-average basis, Moody's internal-use computer software has an estimated useful life of approximately 4.5 years.

The ~~following is a discussion of~~ material ~~acquisitions completed by the Company. The~~ business ~~combinations~~combination described below ~~are~~is accounted for using the acquisition method of accounting whereby assets acquired and liabilities assumed were recognized at fair value on the date of the transaction. Any excess of the purchase price over the fair value of the assets acquired and liabilities assumed was recorded to goodwill. Goodwill typically results through expected synergies from combining operations of an acquiree and an acquirer, anticipated new customer acquisition and products, as well as from intangible assets that do not qualify for separate recognition.

qualify for separate recognition. Pro forma financial information has not been presented for any of the acquired businesses described below as the financial results of these acquired entities are not material relative to the Company’s financial results.

The table below details the total consideration relating to the acquisition:

Shown below is the purchase price allocation, which summarizes the fair value of the assets and liabilities assumed, at the date of acquisition:

The goodwill recognized as a result of this acquisition includes, among other things, the value of combining the complementary product portfolios of ~~the Company~~Moody's and ~~RDC,~~RMS, which is expected to extend the ~~Company’s~~Company's reach into new market segments. The goodwill also includes the combined company's ability to accelerate technology innovations into new product adjacencies (leveraging RMS's team of data scientists, modelers and ~~evolving market segments~~software engineers) as well as ~~cost savings synergies, expected new customer acquisitions~~combining RMS's products with Moody’s core data and ~~products.~~analytics offerings to provide holistic integrated risk solutions.

Goodwill, of which $1,267 million and $90 million has been assigned to the MA ~~segment,~~and MIS segments, respectively, is not deductible for tax purposes. The amount of goodwill allocated to the MIS segment relates to the integration of certain of RMS's models/processes into the Company's ESG solutions offerings.

~~RDC is a component~~Other assets in the table above includes an indemnification asset of $95 million related to uncertain tax positions assumed in the ~~Bureau van Dijk reporting unit~~transaction, for ~~purposes~~which the Company expects to be indemnified by the sellers in the event of ~~the Company’s annual goodwill impairment assessment.~~an unfavorable outcome.

Transaction costs directly related to the ~~RDC~~RMS acquisition were ~~not material.~~

Supplemental information on an unaudited pro forma basis is presented below for the twelve months ended December 31, 2021 as if the acquisition of RMS occurred on January 1, 2021. The ~~following businesses were acquired in 2020~~pro forma financial information is presented for comparative purposes only, based on certain estimates and ~~operate in the MA reportable segment:~~

The ~~following businesses were acquired in 2019 and 2018 and operate~~unaudited pro forma results do not include any anticipated cost savings or other effects of the planned integration of RMS. Accordingly, the pro forma results above are not necessarily indicative of the results that would have been reported if the acquisition had occurred on the dates indicated, nor are the pro forma results indicative of results which may occur in the ~~MA reportable segment:~~

On ~~August 29, 2019,~~June 30, 2022, the ~~board~~chief executive officer of ~~directors of ICRA terminated~~Moody’s approved the employment of ICRA's CEO and on September 28, 2019, the shareholders of ICRA voted to remove the former CEO from his position on ICRA's board of directors. ICRA appointed a new Managing Director & Group CEO effective August 10, 2020. ICRA has reported2022 - 2023 Geolocation Restructuring Program. The Company estimates that the ~~Securities~~program will result in annualized savings of $145 million to $165 million per year. This program relates to the Company's post-COVID-19 geolocation strategy and ~~Exchange Board~~other strategic initiatives and includes the rationalization and exit of India (SEBI) issued an adjudication order dated December 26, 2019 imposing a penalty of INR 25 lakh (approximately $35,000) on ICRA in connection with credit ratings assigned to one of ICRA’s customers and the customer’s subsidiaries. ICRA has further reported that: (i) it had appealed that order; and (ii) it has received a related "show cause" notice from SEBI asking ICRA to demonstrate why the penalty imposed should not be increased. In an order dated September 22, 2020, SEBI increased the penalty imposed on ICRA from INR 25 lakh to INR 1 crore (approximately $140,000) and ICRA has disclosed that it has appealed that order. In addition, ICRA has disclosed that it completed the internal examinations it conducted into anonymous allegations that were forwarded to ICRA by SEBI, certain ~~additional allegations made during the course of that examination,~~leased office spaces and a ~~separate anonymous complaint. ICRA reported that its Board~~reduction in staff, including the relocation of ~~Directors have taken appropriate actions based on~~certain job functions. Cumulative charges related to this program are shown in the ~~findings~~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 ~~completed examinations. As~~future program and employee retention initiatives. The 2022 - 2023 Geolocation Restructuring Program is substantially complete as of December 31, 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 ~~date~~end of this annual report on Form 10-K, the Company is unable to estimate the financial impact, if any, that may result from a potential unfavorable conclusion of these matters or any other ICRA inquiry. An unfavorable resolution of such matters may negatively impact ICRA’s future operating results, which could result in an impairment of goodwill and amortizable intangible assets in future quarters.2024.

Total expenses included in the accompanying consolidated statements of operations relating to the Company's ~~restructuring programs~~2022 - 2023 Geolocation Restructuring Program are as ~~follows:~~

Changes to the ~~assets. The fair value~~restructuring liability were as follows:

As of December 31, ~~2020, a majority~~2023, substantially all of the remaining ~~$21~~$36 million restructuring liability is expected to be paid out ~~through 2022.~~in 2024.

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

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.

The money market funds and 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.

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

December 31,
2020 2019
Other liabilities:
Pension and other retirement employee benefits $ 244 $ 299
Interest accrued on UTPs 113 82
MAKS indemnification provisions 33 43
Income tax liability – non-current portion 18 51
Derivative instruments designated as accounting hedges 145 0
Restructuring liability 3 3
Other 34 26
Total other liabilities $ 590 $ 504
Moody's holds various investments accounted for under the equity method, the most significant of which is the Company's minority investment in CCXI. Moody's also holds various investments measured using the measurement alternative, the most significant of which is the Company's minority interest in BitSight.

Refer to Note 24 for disclosure on earnings from non-consolidated affiliates, which are included within other non-operating income, net.

Year Ended December 31, Location in the consolidated
statement of operations
2020 2019 2018
Currency translation adjustment losses
Sale of foreign subsidiaries $ 0 $ (32) $ 0 Loss pursuant to the divestiture of MAKS
Total currency translation adjustment losses 0 (32) 0
Losses on cash flow hedges
Interest rate contract (3) 0 0 Other non-operating income (expense), net
Income tax effect of item above 1 0 0 Provision for income taxes
Total net losses on cash flow hedges (2) 0 0
Gains on net investment hedges
Cross currency swaps 1 0 0 Other non-operating income (expense), net
FX forwards 0 3 0 Other non-operating income (expense), net
Total before income taxes 1 3 0
Income tax effect of item above 0 (1) 0 Provision for income taxes
Total net gains on net investment hedges 1 2 0
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income (6) (3) (5) Other non-operating income (expense), net
Accelerated recognition of loss due to settlement (2) 0 0 Other non-operating income (expense), net
Total before income taxes (8) (3) (5)
Income tax effect of item above 2 1 1 Provision for income taxes
Total pension and other retirement benefits (6) (2) (4)
Total losses included in Net Income attributable to reclassifications out of AOCI $ (7) $ (32) $ (4)
The following tables show changes in AOCL by component (net of tax):

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

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

The expected rate of return on plan assets represents the Company’s best estimate of the long-term return on plan assets and is determined by using a building block approach, which generally weighs the underlying long-term expected rate of return for each major asset class based on their respective allocation target within the plan portfolio, net of plan paid expenses. As the assumption reflects a long-term time horizon, the plan performance in any one particular year does not, by itself, significantly influence the Company’s evaluation. For ~~2020,~~2023, the expected rate of return used in calculating the net periodic benefit costs was ~~4.45%~~6.55%. For ~~2021,~~2024, the Company’s expected rate of return assumption is ~~5.45%~~6.10% to reflect the Company’s current view of long-term capital market outlook. In addition, the Company has updated its mortality assumption by adopting the newly released mortality improvement scale MP-2020 to accompany the Pri2012 mortality tables to reflect the latest information regarding future mortality expectations by the Society of Actuaries.

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

The Company’s investment policy uses risk-controlled investment strategies by increasing the plan’s asset allocation to fixed income securities and specifying ranges of acceptable target allocation by asset class based on different levels of the plan’s accounting funded status. In addition, the investment policy also requires the investment-grade fixed income assets to be rebalanced between shorter and longer duration bonds as the interest rate environment changes. This investment policy is designed to help protect the plan’s funded status and to limit volatility of the Company’s contributions. Based on the policy, the Company’s current target asset allocation is approximately ~~33%~~35% (range of ~~28%~~23% to ~~38%~~46%) in equity securities, ~~62%~~61% (range of ~~57%~~44% to ~~67%~~77%) in fixed income securities and 5% (range of 2% to 8%) in other investments and the plan will use a combination of active and passive investment strategies and different investment styles for its investment portfolios within each asset class. The plan’s equity investments are diversified across U.S. and non-U.S. stocks of small, medium and large capitalization. The plan’s fixed income investments are diversified principally across U.S. and non-U.S. government and corporate bonds, which are expected to help reduce plan exposure to interest rate variation and to better align assets with obligations. The plan also invests in other fixed income investments such as debts rated below investment grade, emerging market debt, and convertible securities. The plan’s other investment, which is made through a private real estate debt fund, is expected to provide additional diversification benefits and absolute return enhancement to the plan assets.

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

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

The Company ~~contributed $99 million~~did not contribute to its U.S. funded pension plan during ~~2020, but did not contribute to this plan during~~ the ~~year~~years ended December 31, ~~2019.~~2023 and 2022. The Company made payments of $11 million and $8$7 million related to its U.S. unfunded pension plan obligations during the years ended December 31, ~~2020~~2023 and ~~2019,~~2022, respectively. The Company currently does not anticipate making a contribution to its funded pension plan in ~~2021,~~2024, and anticipates making payments of ~~$44~~$13 million related to its unfunded U.S. pension plans and ~~$1 million~~immaterial payments related to its other Retirement Plans during the year ended December 31, ~~2021.~~2024.

Moody’s has a Profit Participation Plan covering substantially all U.S. employees. The Profit Participation Plan provides for an employee salary deferral and the Company matches employee contributions, equal to 50% of employee contribution up to a maximum of 3% of the employee’s pay. Effective January 1, 2008, all new hires are automatically enrolled in the Profit Participation Plan when they meet eligibility requirements unless they decline participation. As the Company’s U.S. DBPPs are closed to new entrants effective January 1, 2008, all eligible new hires will instead receive a retirement contribution into the Profit Participation Plan in value similar to the pension benefits. Additionally, effective January 1, 2008, the Company implemented a deferred compensation plan in the U.S., which is unfunded and provides for employee deferral of compensation and Company matching contributions related to compensation in excess of the IRS limitations on benefits and contributions under qualified retirement plans. Total expenses associated with U.S. defined contribution plans were ~~$44~~$71 million, ~~$43~~$35 million and ~~$27~~$54 million in the years ended December 31, ~~2020, 2019,~~2023, 2022 and ~~2018,~~2021, respectively.

Effective January 1, 2008, Moody’s has designated the Moody’s Stock Fund, an investment option under the Profit Participation Plan, as an Employee Stock Ownership Plan and, as a result, participants in the Moody’s Stock Fund may receive dividends in cash or may reinvest such dividends into the Moody’s Stock Fund. Moody’s paid approximately $1 million during each of the years ended December 31, ~~2020, 2019~~2023, 2022, and ~~2018,~~2021, respectively, for the Company’s common shares held by the Moody’s Stock Fund. The Company records the dividends as a reduction of retained earnings in the Consolidated Statements of Shareholders’ ~~Equity (Deficit).~~Equity. The Moody’s Stock Fund held approximately ~~360,600~~315,400 and ~~411,100~~329,300 shares of Moody’s common stock at December 31, ~~2020~~2023 and ~~2019,~~2022, respectively.

Certain of the Company’s non-U.S. operations provide pension benefits to their employees. The non-U.S. defined benefit pension plans are immaterial. For defined contribution plans, company contributions are primarily determined as a percentage of employees’ eligible compensation. Expenses related to these defined contribution plans for the years ended December 31, ~~2020, 2019~~2023, 2022, and ~~2018~~2021 were ~~$29~~$42 million, ~~$25~~$37 million, and ~~$26~~$32 million, respectively.

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

On September 15, 2021, the Company acquired RMS, which is discussed in more detail in Note 9. As part of the acquisition, the Company registered the RMS Plans as part of the purchase agreement to acquire RMS. Under the RMS Plans, 1.2 million shares of the Company’s common stock have been reserved for issuance. The RMS Plans provide that options are exercisable not later than ten years from the grant date. The vesting period is generally determined by the Board at the date of the grant and is four years for both options and restricted stock granted during 2021.

As a result of the acquisition, certain RMS employees' unvested equity awards (employee stock options and restricted stock) with an acquisition-date fair value of $33 million were converted into equity awards of the Company based on an exchange ratio as defined in the purchase agreement. The portion of the fair value of the replacement awards related to services provided prior to the acquisition was $5 million and was accounted for as consideration transferred (See Note 9). The remaining portion of the replacement awards of $28 million, which is associated with post-acquisition service requirements, will be recognized as compensation expense over the remaining vesting period.

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

Year Ended December 31,
2020 2019 2018
Expected dividend yield 0.80 % 1.14 % 1.05 %
Expected stock volatility 23 % 24 % 26 %
Risk-free interest rate 1.43 % 2.56 % 2.82 %
Expected holding period -in years 5.7 6.2 6.2
Grant date fair value $ 60.66 $ 43.29 $ 45.73
Due to the RMS replacement option awards being heavily in-the-money at the acquisition date, the Company utilized a binomial valuation approach in 2021 to determine the fair value of the options, which approximated the intrinsic value of the replaced awards at the acquisition date.

The following represents the fair value of the options at grant date (including the RMS replacement option awards for the year ended December 31, 2021):

A summary of option activity as of December 31, ~~2020~~2023 and changes during the year then ended is presented below:

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between Moody’s closing stock price on the last trading day of the year ended December 31, ~~2020~~2023 and the exercise prices, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options as of December 31, ~~2020.~~2023. This amount varies based on the fair value of Moody’s stock. As of December 31, ~~2020,~~2023, there was $6$9 million of total unrecognized compensation expense related to options. The expense is expected to be recognized over a weighted average period of ~~2.3~~1.9 years.

As of December 31, ~~2020,~~2023, there was ~~$162~~$219 million of total unrecognized compensation expense related to nonvested restricted stock. The expense is expected to be recognized over a weighted average period of 2.4 years.

As of December 31, ~~2020,~~2023, there was ~~$21~~$24 million of total unrecognized compensation expense related to this plan. The expense is expected to be recognized over a weighted average period of ~~1.8~~2.0 years.

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

In addition, the Company also sponsors the ESPP. Under the ESPP, 6 million shares of common stock were reserved for issuance. The ESPP ~~allows~~permits eligible employees to purchase common stock of the Company on a monthly basis at a discount to the average of the high and the low trading prices on the New York Stock Exchange on the last trading day of each month. This discount was 5% in ~~2020, 2019,~~2023, 2022, and ~~2018~~2021 resulting in the ESPP qualifying for non-compensatory status under ASC Topic ~~718 of the ASC.~~718. Accordingly, no compensation expense was recognized for the ESPP in ~~2020, 2019,~~2023, 2022, and ~~2018.~~2021. The employee purchases are funded through after-tax payroll deductions, which plan participants can elect from 1one percent to 10ten percent of compensation, subject to the annual federal limit.

On December 22, 2017, the Tax Act was signed into law, which resulted in significant changes to U.S. corporate tax laws. The Tax Act includes a mandatory one-time deemed repatriation tax (“transition tax”) on previously untaxed accumulated earnings of foreign subsidiaries and beginning in 2018 reduces the statutory federal corporate income tax rate from 35% to 21%. ~~Due~~Accordingly, the Company determined the transition tax to be $236 million, with the ~~complexities~~remaining balance due of ~~the Tax Act, the SEC issued guidance requiring that companies provide a reasonable estimate of the impact of the Tax Act to the extent such reasonable estimate has been determined. Accordingly,~~$15 million as of December 31, 2017, the Company recorded a provisional estimate for the transition tax of $247 million. In September, 2018, the Company filed its 2017 federal income tax return and revised its determination of the transition tax to $236 million, a reduction of $11 million from the estimate at December 31, 2017. The reduction was primarily due to proposed regulations issued by the Internal Revenue Service and the finalization of earnings and profits calculations. A portion of the transition tax will be payable over eight years, starting in 2018, and will not accrue interest. The above revised determination of transition tax may be impacted by a number of additional considerations, including but not limited to the issuance of additional regulations.

As a result of the Tax Act, all previously net undistributed foreign earnings have now been subject to U.S. tax. The Company regularly evaluates which entities it will indefinitely reinvest earnings. The Company has provided deferred taxes for those entities whose earnings are not considered indefinitely reinvested.

The ~~Company has recorded reductions in its income~~Company’s annual tax ~~provision of approximately $60 million, or 269 BPS,~~expense for the ~~full-year~~year ended December 31, 2023 includes benefits from the favorable resolution of ~~2020,~~certain U.S. and ~~approximately $44~~non-U.S. UTPs of $120 million, ~~or 242 BPS, for the full-year~~excess tax benefits from stock compensation of ~~2019, relating~~$15 million, and other net decreases to ~~Excess Tax Benefits on stock-based compensation.~~tax positions of $13 million.

The Company had valuation allowances of ~~$15~~$24 million and $9$21 million at December 31, ~~2020~~2023 and ~~2019,~~2022, respectively, related to foreign net operating losses for which realization is uncertain.

As of December 31, ~~2020,~~2023, the Company had ~~$483~~$196 million of UTPs of which ~~$432~~$93 million represents the amount that, if recognized, would impact the ~~effective tax rate~~ETR in future periods. The ~~increase~~decrease in ~~UTPs~~2021 through 2023 resulted primarily ~~resulted~~ from the ~~additional reserves established for non-U.S.~~favorable resolution of uncertain tax ~~exposures~~positions in various U.S. and ~~an adjustment to the transition tax under~~non U.S. ~~tax reform. In addition, the Company has recorded a deferred tax asset in the amount~~jurisdictions.

The Company classifies interest related to UTPs in interest expense in its consolidated statements of operations. Penalties, if incurred, are recognized in other non-operating ~~expenses. During the years ended December 31, 2020~~(expense) income, net. Refer to Note 18 for disclosure of interest (expense) income relating to UTPs and ~~2019, the Company incurred a net interest expense of $31 million and $28 million respectively, related to UTPs.~~other tax-related liabilities. As of December 31, ~~2020~~2023, 2022 and ~~2019,~~2021 the amount of accrued interest recorded in the Company’s consolidated balance sheets related to UTPs was ~~$113~~$36 million, $47 million and ~~$82~~$59 million, respectively.

Moody’s Corporation and subsidiaries are 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 ~~return~~returns for 2019 ~~remains open to examination and 2017 and 2018~~through 2020 are currently under examination and 2021 through 2022 remain open to examination. The Company’s New York City tax returns for ~~2014~~2015 through ~~2017~~2020 are currently under examination and years 2021 and 2022 are open for examination. The Company’s U.K. tax ~~return for 2012 is currently under examination and its~~ returns ~~for 2013 through 2019~~from 2017 to 2022 remain open to examination.

~~For current ongoing audits related~~Given the number of years and nature of matters that remain subject to ~~open~~examination in various tax ~~years,~~jurisdictions both in the U.S. and internationally, the Company ~~estimates that it~~ is unable to estimate a range of possible ~~that the balance of~~changes to its UTPs could decrease in the next twelve months as a result of the effective settlement of these audits, which might involve the payment of additional taxes, the adjustment of certain deferred taxes and/or the recognition of tax benefits.for 2024. It is also possible that new issues might be raised by tax authorities which might necessitate increases to the balance of UTPs. As the Company is unable to predict the timing of conclusion of these audits, the Company 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 ASC Topic 740.

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% did not have a significant impact on Moody’s ETR. The excise tax of 1% on corporate share buybacks is recorded to shareholders' equity and does not have an impact on the Company’s ETR.

During 2023, 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 effective tax rate up to 15%. Through December 31, 2023, the Company continues to assess the impact of the Pillar Two minimum tax requirements for 2024. The analysis of the impact of the new requirements is currently being finalized, although it is not expected to have a material impact upon our results of operations or financial position.

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 ~~2012 Senior Notes, the 2017 Senior Notes due 2023, the 2017 Senior Notes due 2028 and the 2020 Senior Notes due 2025,~~table below, which ~~are~~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.

Interest on borrowings under the ~~facility may range from 0 BPS to 22.5 BPS per annum for Alternate Base Rate loans (as defined in the 2018~~2021 Credit Facility ~~agreement) or~~is payable at rates that are based on ~~the London InterBank Offered~~an adjusted term SOFR Rate ~~(“LIBOR”)~~ plus a premium that can range from 80.5 ~~BPS~~basis points to 122.5 ~~BPS~~basis points, depending on the Company’s index debt ratings, as set forth in the ~~2018~~2021 Facility ~~agreement.~~Agreement. The Company also has the option to choose other rates, such as those based on adjusted Daily Simple SOFR or an alternate base rate as set forth in the 2021 Facility Agreement. The Company also pays quarterly facility fees, regardless of borrowing activity under the ~~facility.~~Facility. The quarterly fees for the ~~2018~~2021 Facility can range from 7 ~~BPS~~basis points of the ~~facility~~2021 Credit Facility amount to 15 ~~BPS,~~basis points, depending on the Company’s index debt ratings. The ~~2018~~facility fees for the 2021 Credit Facility ~~contains~~are subject to sustainability-based pricing adjustments based on the Company’s annual performance with respect to certain ~~customary covenants including~~spending with vendors who have committed to and publicly announced the setting of science-based targets to reduce greenhouse gas emissions. The 2021 Facility contains a financial covenant that requires the Company to maintain a total debt to EBITDA ~~ratio~~Ratio of (i) not more than 4 to 1 at the end of any fiscal quarter or (ii) not more than 4.5 to 1 as of the end of the first three consecutive quarters immediately following any acquisition with consideration in excess of $500 million, subject to certain conditions as set forth in the ~~2018 Facility agreement.~~2021 Facility.

On August 3, 2016, the Company entered into a private placement commercial paper program under which the Company may issue CP notes up to a maximum amount of $1.0 billion. Borrowings under the CP Program are backstopped by the ~~2018~~2021 Facility. Amounts under the CP Program may be re-borrowed. The maturity of the CP Notes will vary, but may not exceed 397 days from the date of issue. The CP Notes are sold at a discount from par, or alternatively, sold at par and bear interest at rates that will vary based upon market conditions. The rates of interest will depend on whether the CP Notes will be a fixed or floating rate. The interest on a floating rate may be based on the following: (a) certificate of deposit rate; (b) commercial paper rate; (c) the federal funds rate; (d) the ~~LIBOR;~~SOFR; (e) prime rate; (f) Treasury rate; or (g) such other base rate as may be specified in a supplement to the private placement agreement. The CP Program contains certain events of default including, among other things: non-payment of principal, interest or fees; entrance into any form of moratorium; and bankruptcy and insolvency events, subject in certain instances to cure periods. As of December 31, ~~2020,~~2023, the Company has 0no CP borrowings outstanding.

The Company may prepay certain of its senior notes, in whole or in part, but may incur a ~~Make-Whole Amount~~Make Whole amount penalty.

During 2020, the Company issued the 2020 Senior Notes, due 2025, the 2020 Senior Notes, due 2050 and the 2020 Senior Notes, due 2060. The key terms of these debt issuances are set forth in the table above.

At December 31, ~~2020,~~2023, the Company was in compliance with all covenants contained within all of the debt agreements. All of the debt agreements contain cross default provisions which state that default under one of the aforementioned debt instruments could in turn permit lenders under other debt instruments to declare borrowings outstanding under those instruments to be immediately due and payable. As of December 31, ~~2020,~~2023, there were no such cross defaults.

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

The fair value of the Company’s debt is estimated based on quoted ~~market~~ prices ~~for similar instruments. Accordingly, the inputs used to estimate the fair value~~in active markets as of the ~~Company’s long-term debt~~reporting date, which are ~~classified as~~considered Level 21 inputs within the fair value hierarchy.

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

During ~~2020,~~2023, Moody’s repurchased ~~2.0~~1.5 million shares of its common stock under its share repurchase program and issued a net ~~1.4~~0.8 million shares under employee stock-based compensation plans. The net amount includes shares withheld for employee payroll taxes.

~~During 2019,~~On February 5, 2024, the ~~Company entered into an ASR with a financial institution counterparty to~~Board authorized $1 billion of additional share repurchase ~~$500 million~~authority, which will commence after the utilization of ~~its outstanding common stock. Refer to Note 5 for further details.~~the current remaining authority.

On February ~~9, 2021,~~5, 2024, the Board approved the declaration of a quarterly dividend of ~~$0.62~~$0.85 per share of Moody’s common stock, payable on March ~~18, 2021~~15, 2024 to shareholders of record at the close of business on February ~~25, 2021.~~23, 2024. The continued payment of dividends at the rate noted above, or at all, is subject to the discretion of the Board.

During ~~2020,~~2023 and 2022, the Company recorded ~~$21~~charges of $32 million ~~of ROU Asset impairment charges~~and $23 million, respectively, related to the exit of certain real estate ~~leases.~~leases that resulted in ROU Asset impairment. The ~~impairment~~ charges in both years were recorded within ~~Restructuring~~restructuring expense onin the consolidated ~~statement~~statements of operations. Refer to Note 11 for further details.

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 17 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.

The Company is organized into 2two operating segments: ~~MIS~~MA and MAMIS and accordingly, the Company reports in 2two reportable segments: ~~MIS~~MA and ~~MA.~~MIS.

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

The MIS segment consists of 5five LOBs. The CFG, ~~SFG,~~ FIG, PPIF and ~~PPIF~~SFG LOBs generate revenue principally from fees for the assignment and ongoing monitoring of credit ratings on debt obligations and the entities that issue such obligations in markets worldwide. The MIS Other LOB primarily consists of financial instruments pricing services in the Asia-Pacific region, ICRA non-ratings revenue and revenue from providing ~~ESG research, data and assessments.~~professional services.

The MA segment develops a wide range of products and services that support the risk management activities of institutional participants in global financial markets. Beginning in the first quarter of 2020, the MA segment now consists of 2 LOBs - RD&A and ERS. Subsequent to the divestiture of MAKS in the fourth quarter of 2019, the MALS business, which was historically part of the PS LOB through December 31, 2019, was reclassified to the RD&A LOB. Prior year revenue by LOB has not been reclassified as the amounts relating to the MALS business were not material.

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, ~~in years prior to 2019, the Company generally allocated costs ratably based on each segment’s share of total revenue.~~

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

The table below shows revenue and Adjusted Operating Income ~~and operating income~~ by reportable segment. Adjusted Operating Income is a financial metric utilized by the Company’s chief operating decision maker to assess the profitability of each reportable segment. Refer to Note 3 for further details on the components of the Company’s revenue.

The table below shows cumulative restructuring expense incurred through December 31, 2023 by reportable segment.

The 2022 - 2023 Geolocation Restructuring program is more fully discussed in Note 11.

Not applicable.

The Company carried out an evaluation, as required by Rule 13a-15(b) under the Exchange Act, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Interim Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of the end of the period covered by this report (the “Evaluation Date”). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the communication to the Company’s management, including the Company’s Chief Executive Officer and Interim Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Information in response to this Item is set forth under the caption “Management’s Report on Internal Control Over Financial ~~Reporting”,~~Reporting,” in Part II, Item 8 of this annual report on Form 10-K.

The Company’s management, including the Company’s Chief Executive Officer and Interim Chief Financial Officer, has determined that there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, these internal controls over financial reporting during the three months ended December 31, ~~2020. Although a significant portion~~2023.

The Company's disclosure controls and procedures are designed to provide reasonable assurance of achieving the objectives as specified above. The Company's ~~workforce began working remotely in mid-March~~management does not expect, however, that these disclosure controls and procedures will prevent or detect all instances of error or fraud. Any control system, regardless of how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur, or that all control issues and instances of fraud, if any, within the ~~COVID-19 pandemic, Moody's has not experienced any material impact to its internal controls over financial reporting.~~

Not applicable.

Except for the information relating to the executive officers of the Company set forth in Part I of this annual report on Form 10-K, the information called for by Items 10-14 is contained in the Company’s definitive proxy statement for use in connection with its annual meeting of stockholders scheduled to be held on April ~~20, 2021,~~16, 2024, and is incorporated herein by reference.

Information required by this Item 10 is included under the heading “Information about our Executive Officers” in Part I, Item 1 of this Form 10‑K, as well as under the headings “Item 1–Election of Directors,” “Corporate Governance–Codes of Business Conduct and Ethics,” and “The Audit Committee,” in the ~~2021~~2024 Proxy Statement and is incorporated by reference.

Information required by this Item 11 is included under the headings “Compensation Discussion and Analysis,” “Summary Compensation Table,” “Grants of Plan-Based Awards Table for ~~2020,~~2023,” “Outstanding Equity Awards at Fiscal Year-End Table for ~~2020,~~2023,” “Option Exercises and Stock Vested Table for ~~2020,~~2023,” “Pension Benefits Table for ~~2020,~~2023,” “Non-Qualified Deferred Compensation Table,” “Potential Payments Upon Termination or Change in Control,” “Compensation of Directors,” “Relationship of Compensation Practices to Risk ~~Management”~~Management,” "Pay Versus Performance," “CEO Pay Ratio,” and “Report of the Compensation & Human Resources Committee” in the ~~2021~~2024 Proxy Statement and is incorporated by reference.

Information required by this Item 12 is included under the heading “Equity Compensation Plan Information” in Part II, Item 5 of this Form 10-K, as well as under the heading “Security Ownership of Certain Beneficial Owners and Management” in the ~~2021~~2024 Proxy Statement and is incorporated by reference.

Information required by this Item 13 is included under the headings “Corporate ~~Governance –Director~~Governance–Director Independence” and “Certain Relationships and Related Transactions” in the ~~2021~~2024 Proxy Statement and is incorporated by reference.

Information required by this Item 14 is included under the headings “Item 2–Ratification of Appointment of Independent Registered Public Accountants–Principal Accounting Fees and Services” and “The Audit Committee” in the ~~2021~~2024 Proxy Statement and is incorporated by reference.

None.

INDEX TO EXHIBITS

None.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February ~~19, 2021~~14, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.


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


			Page
		~~Page(s)~~
	Glossary of Terms and Abbreviations		4-9
PART I.
Item 1.	BUSINESS		10
	Background		10
	The Company		10~~-15~~
	S ustainability		14
	Human Capital		1615~~-19~~
	Climate		18
	Moody’s Strategy		2019~~-21~~
	Prospects for Growth		2220~~-24~~
	Competition		2421
	Regulation		2422~~-25~~
	Intellectual Property		2622

	Available Information		2623
	Executive Officers of the Registrant		2723~~-28~~
Item 1A.	RISK FACTORS		2925~~-39~~
Item 1B.	UNRESOLVED STAFF COMMENTS		35
Item 1C.	40CYBERSECURITY AND RISK MANAGEMENT		35
Item 2.	PROPERTIES		4037
Item 3.	LEGAL PROCEEDINGS		4037
Item 4.	MINE SAFETY DISCLOSURES		4037
PART II.
Item 5.	MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES		4137
	Moody’s Purchases of Equity Securities		4137
	Common Stock Information		4138
	Equity Compensation Plan Information		4138
	Performance Graph		4239

Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		4340
	The Company		4340
	Current Matters Impacting Moody's Business		40
	Critical Accounting Estimates		4440~~-49~~
	Reportable Segments		4944
	Results of Operations		5045~~-63~~
	Market Risk		6359~~-64~~
	Liquidity and Capital Resources		6560~~-70~~
	Recently Issued Accounting Pronouncements		7165
	Contingencies		7165
	Forward-Looking Statements		7165


		Page
Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	7267
Item 8.	FINANCIAL STATEMENTS	7367~~-130~~
Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	~~131~~123
Item 9A.	CONTROLS AND PROCEDURES	~~131~~123


		~~Page(s)~~
Item 9B.	OTHER INFORMATION	123
Item 9C.	~~131~~DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	123
PART III.
Item 10.	DIRECTORS, EXECUTIVE OFFICERS AND ~~CORPORATION~~CORPORATE GOVERNANCE	~~132~~123
Item 11.	EXECUTIVE COMPENSATION	~~132~~123
Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	~~132~~123
Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	~~132~~124
Item 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	~~132~~124
PART IV.
Item 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	~~133~~124

INDEX TO EXHIBITS		~~133~~124~~-137~~
Item 16.	FORM 10-K SUMMARY	~~137~~127
SIGNATURES		~~138~~128


TERM						DEFINITION

~~ABS Suite~~						~~Business acquired by the Company in October 2019 which includes a software platform used by issuers and trustees for administration of asset-backed and mortgage-backed securities programs~~

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

Acquisition-Related Intangible Amortization Expense						Amortization ofexpense relating to definite-lived intangible assets acquired by the Company from all business combination transactions

~~Acquisition-Related Expenses~~						~~Consists of expenses incurred over a multi-year period to complete and integrate the acquisition of Bureau van Dijk~~

Adjusted Diluted EPS						Diluted EPS excluding the impact of certain items as detailed in the section entitled “Non-GAAP Financial Measures”

Adjusted Net Income						Net Income excluding the impact of certain items as detailed in the section entitled “Non-GAAP Financial Measures”

Adjusted Operating Income						Operating income excluding the impact of certain items as detailed in the section entitled "Non-GAAP Financial Measures"

Adjusted Operating Margin						Adjusted Operating Income divided by revenue

AI						Artificial Intelligence

Americas						Represents countries within North and South America, excluding the U.S.



~~AML~~AOCI(L)						~~Anti-money laundering~~

~~AOCI~~						Accumulated other comprehensive income (loss); a separate component of shareholders’ equity ~~(deficit)~~

Annualized Recurring Revenue (ARR)						A supplemental performance metric to provide additional insight on the estimated value of MA's recurring revenue contracts at a given point in time, excluding the impact of FX and contracts related to acquisitions
~~API~~						~~Application Programming Interface~~

ASC						The FASB Accounting Standards Codification; the sole source of authoritative GAAP as of July 1, 2009 except for rules and interpretive releases of the SEC, which are also sources of authoritative GAAP for SEC registrants

Asia-Pacific						Represents Australia and countries in Asia including but not limited to: China, India, Indonesia, Japan, Republic of South Korea, Malaysia, Singapore, Sri Lanka and Thailand

ASR						Accelerated Share Repurchase

ASU						The FASB Accounting Standards Update to the ASC. ~~It also provides~~Provides background information for accounting guidance and the bases for conclusions on the changes in the ASC. ASUs are not considered authoritative until codified into the ASC

BES						Business Engagement Survey; A Moody's employee survey that focuses on purpose, leadership, manager effectiveness, wellbeing, connection, and empowerment

~~B&H~~BitSight						~~Barrie & Hibbert Limited, an acquisition completed~~A provider that helps global market participants understand cyber risk through ratings, analytics, and performance management tools; the Company acquired a minority investment in ~~December 2011; part of the MA segment, a leading provider of risk management modeling tools for insurance companies worldwide~~BitSight in 2021

Board						The board of directors of the Company

BPS						Basis points

Brexit						The withdrawal of the United Kingdom from the European Union

BRG						Business Resource Group
~~Bureau van Dijk~~
CAO						Bureau van Dijk Electronic Publishing, B.V.; a global provider of business intelligence and company information; acquired by the Company on August 10, 2017 via the acquisition of Yellow Maple I B.V., an indirect parent of Bureau van Dijk; part of the RD&A LOB and a reporting unit within the MA reportable segmentChief Administrative Officer

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

CCXI						China Cheng Xin International Credit Rating Co. Ltd.; ~~China’s~~the first and largest domestic credit rating agency approved by the People’s Bank of China; the Company acquired a 49% interest in ~~2006;~~2006 and currently Moody’s owns 30% of ~~CCXI.~~CCXI

CCPA						California Consumer Privacy Act; a privacy law enacted in 2018 by the state of California to regulate the way businesses all over the world can collect, use and share the personal information of California residents

CDP						An international nonprofit organization that helps companies, cities, states and regions to manage their environmental impact through a global disclosure system

CFG						Corporate finance group; an LOB of MIS


TERM						DEFINITION

CISO						Chief Information Security Officer
~~CFG~~						~~Corporate finance group; an LOB of MIS~~

CLO						Collateralized loan obligation

CMBS						Commercial mortgage-backed securities; an asset class within SFG

CODM						Chief Operating Decision Maker

COLI						Corporate-Owned Life Insurance

Commission						European Commission

Common Stock						The Company’s common stock

Company						Moody’s Corporation and its subsidiaries; MCO; Moody’s

~~Content~~						A reporting unit within the MA segment that offers subscription based research, data and analytical products, including credit ratings produced by MIS, credit research, quantitative credit scores and other analytical tools, economic research and forecasts

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

CP						Commercial Paper

CP Notes						Unsecured commercial paper issued under the CP Program

CP Program						A program entered into on August 3, 2016 allowing the Company to privately place CP up to a maximum of $1 billion for which the maturity may not exceed 397 days from the date of issue, and which is backstopped by the ~~2018 Facility.~~2021 Facility

CPRA						California Privacy Rights Act of 2020; an amendment to the CCPA, which adds additional consumer privacy rights and obligations for businesses

CRAs						Credit rating agencies

CRE						Commercial Real Estate

CreditView						A product offering from MA that incorporates credit ratings, research and data from Moody’s Investors Service plus research, data and content from Moody’s Analytics.

CTSO						Chief Technology Services Officer

Cyber Committee						The Cyber Risk Enterprise Risk Management Committee

Data and Information (D&I)						LOB within MA which provides vast data sets on companies and securities via data feeds and data applications products

DBPPs						Defined benefit pension plans

Decision Solutions (DS)						LOB within MA that provides SaaS solutions supporting banking, insurance, and KYC workflows. This LOB utilizes components from the Data & Information and Research & Insights LOBs to provide risk assessment solutions



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

DORA						The European Union Digital Operational Resilience Act

EBITDA						Earnings before interest, taxes, depreciation and amortization



EMEA						Represents countries within Europe, the Middle East and Africa

EPS						Earnings per share

ERS						Enterprise Risk Solutions; ana former LOB within MA, which ~~offers~~offered risk management software solutions as well as related risk management advisory engagements services

~~ESA~~						~~Economics and Structured Analytics; part of the RD&A line of business within MA~~

ESG						Environmental, Social and Governance

ESMA						European Securities and Markets Authority

ESTR						Euro Short-Term Rate

ESPP						Employee stock purchase plan

ETR						Effective tax rate


TERM						DEFINITION

EU						European Union

EU AI Act						A proposed regulation in the EU, which would introduce a common regulatory and legal framework for artificial intelligence

EUR						Euros

EURIBOR						The Euro Interbank Offered Rate

Eurozone						Monetary union of the EU member states which have adopted the euro as their common currency

Excess Tax Benefits						The difference between the tax benefit realized at exercise of an option or delivery of a restricted share and the tax benefit recorded at the time the option or restricted share is expensed under GAAP

Exchange Act						The Securities Exchange Act of 1934, as amended

ELT						Executive Leadership Team

External Revenue						Revenue excluding any intersegment amounts

FASB						Financial Accounting Standards Board

FCA						Financial Conduct Authority; supervises Credit Rating Agencies in the U.K. in order to ensure credit ratings are independent, objective and of adequate quality
~~Fermat~~						~~Fermat International; an acquisition completed in October 2008; part of the MA segment; a provider of risk and performance management software to the global banking industry~~


~~TERM~~						~~DEFINITION~~

FIG						Financial institutions group; an LOB of MIS



~~Four Twenty Seven~~						~~A provider of data, intelligence, and analysis related to physical climate risks; acquired by the Company in July 2019~~

Free Cash Flow						Net cash provided by operating activities less cash paid for capital additions

FTC						Federal Trade Commission

FTSE						Financial Times Stock Exchange

FX						Foreign exchange

GAAP						U.S. Generally Accepted Accounting Principles

GBP						British pounds

GDP						Gross domestic product

GDPR						~~European Union’s~~ General Data Protection ~~Regulation~~Regulation; a European regulation implemented in 2018 to enhance EU citizens' control over the personal data that companies can legally hold. GDPR was simultaneously implemented in the U.K., with slight modification to the EU's regulation in 2021 following Brexit

Gen AI						Generative Artificial Intelligence

GRI						Global Reporting Initiative, an international independent standards organization that helps organizations understand and disclose their impact on climate change, human rights and corruption

GLoBE						Global Anti-Base Erosion, also known as "Pillar Two"; tax model issued by the OECD in 2023



HM Treasury						His Majesty's Treasury; the department of the Government of the United Kingdom responsible for developing and executing the government's public finance policy and economic policy

ICRA						ICRA Limited; a provider of credit ratings and research in India.





~~INR~~IASB						~~Indian Rupee~~International Accounting Standards Board

IFRS						International Financial Reporting Standards

Incident Response Plan						The Company's Information Security Incident Response Plan

IOSCO						International Organization of Securities Commissions

IRS						Internal Revenue Service

ISO 27001						An international standard to manage information security

ITkompany						360kompany AG; a platform for business verification and Know Your Customer (KYC) technology solutions acquired by the Company in February 2022


TERM						~~Information technology~~DEFINITION

KMV						KMV LLC and KMV Corporation (“KMV”); a provider of market-based quantitative services for banks and investors in credit-sensitive assets acquired by Moody's in April 2002
~~KIS~~						~~Korea Investors Service, Inc.; a Korean rating agency and consolidated subsidiary of the Company~~

~~KIS Pricing~~						~~Korea Investors Service Pricing, Inc.; a Korean provider of fixed income securities pricing and consolidated subsidiary of the Company~~

~~KIS Research~~						~~Korea Investors Service Research; a Korean provider of financial research and consolidated subsidiary of the Company~~

~~Korea~~						~~Republic of South Korea~~

KYC						Know-your-customer



LIBOR						London Interbank Offered Rate

LLM						Large language model used in the context of Gen AI

LOB						Line of business

MA						Moody’s ~~Analytics—~~Analytics - a reportable segment of MCO; ~~a global provider of data and analytic solutions which help companies make better and faster decisions;~~ consists of ~~two LOBs—RD&A~~three LOBs - Decision Solutions; Research and ~~ERS~~Insights; and Data and Information

ML						Machine Learning

Make Whole ~~Amount~~						The prepayment penalty amount relating to certain Senior Notes, which is a premium based on the excess, if any, of the discounted value of the remaining scheduled payments over the prepaid principal

MAKS						Moody’s Analytics Knowledge Services; formerly known as Copal Amba; ~~provides~~provided offshore research and analytic services to the global financial and corporate sectors; ~~formerly part of the PS LOB within the MA reportable segment; this~~ business was divested in ~~November~~the fourth quarter of 2019

~~MALS~~						~~Moody’s Analytics Learning Solutions;~~ and a reporting unit within the MA reportable segment ~~that includes on-line and classroom-based training services as well as credentialing and certification services~~

MCO						~~Moody’s;~~ Moody’s Corporation and its subsidiaries; the ~~Company~~Company; Moody’s

MD&A						Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~MESG~~						~~Moody's ESG Solutions Group~~

MIS						Moody’s Investors ~~Service—~~Service - a reportable segment of MCO; consists of five ~~LOBs—SFG, CFG, FIG, PPIF~~LOBs - CFG; SFG; FIG; PPIF; and MIS Other

MIS Other						Consists of financial instruments pricing services in the Asia-Pacific region, ICRA non-ratings revenue, ~~from ICRA, KIS Pricing~~ and ~~KIS Research revenue as well as~~ revenue from ~~providing ESG research, data and assessments.~~professional services. These businesses are components of MIS; MIS Other is an LOB of MIS

MNPI						Material non-public information

Moody’s						Moody’s Corporation and its subsidiaries; MCO; the Company


~~TERM~~Moody's Local						~~DEFINITION~~A ratings platform focused on providing credit rating services in Latin American capital markets

MSS						Moody's Shared Services; primarily consists of information technology and support staff such as finance, human resources and legal that support both ~~MIS~~MA and ~~MA.~~MIS

NAV						Net asset value

Net Income						Net income attributable to Moody’s Corporation, which excludes net income from consolidated noncontrolling interests belonging to the minority interest holder

~~New Credit Losses Accounting Standard~~Net Zero Assessments						Updates to the ASC pursuant to ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. This new accounting guidance requires the useAn independent assessment of an ~~“expected credit loss” impairment model for most financial assets reported at amortized cost, which will require entities~~entity’s carbon transition plan relative to ~~estimate expected credit losses over~~a global net zero pathway, consistent with the ~~lifetime~~goals of the ~~instrument.~~

~~New Lease Accounting Standard~~						~~Updates to the ASC pursuant to ASU No. 2016-02, “Leases (ASC Topic 842)”. This new accounting guidance requires lessees to recognize a right-of-use asset and lease liability~~2015 Paris Agreement on ~~the balance sheet for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses and cash flows depend on classification as either a finance or operating lease~~climate change



NIST Framework						NIST Cybersecurity Framework; a set of cybersecurity best practices and recommendations from the National Institute of Standards and Technology (NIST)
~~N/A~~						~~Not applicable~~

NM						Percentage change is not meaningful

Non-GAAP						A financial measure not in accordance with GAAP; these measures, when read in conjunction with the Company’s reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s performance, facilitate comparisons to competitors’ operating results and to provide greater transparency to investors of supplemental information used by management in its financial and operational decision making

NRSRO						Nationally Recognized Statistical Rating Organization, which is a credit rating agency registered with the ~~SEC.~~SEC

~~OCI~~OCI(L)						Other comprehensive income (loss); includes gains and losses on cash flow and net investment hedges, certain gains and losses relating to pension and other retirement benefit obligations and foreign currency translation adjustments

OECD						Organization for Economic Co-operation and Development


~~Omega Performance~~TERM						~~A provider of online credit training; acquired by the Company in August 2018~~DEFINITION

Operating segment						Term defined in the ASC relating to segment reporting; the ASC defines an operating segment as a component of a business entity that has each of the three following characteristics: i) the component engages in business activities from which it may recognize revenue and incur expenses; ii) the operating results of the component are regularly reviewed by the entity’s chief operating decision maker; and iii) discrete financial information about the component is available.

Other Retirement Plans						~~The U.S. retirement healthcare~~Moody's Postretirement Medical and ~~U.S. retirement life insurance plans~~Life Insurance Plan



PCS						Post-Contract Customer Support

PPIF						Public, project and infrastructure finance; an LOB of MIS

Profit Participation Plan						Defined contribution profit participation plan that covers substantially all U.S. employees of the Company

PS						Professional Services, a former LOB within MA which consisted of MAKS and MALS that provided offshore analytical and research services as well as learning solutions and certification programs. Subsequent to the divestiture of MAKS in 2019, revenue from the MALS reporting unit, which previous to 2020 was reported in the PS LOB, is now reported as part of the RD&A LOB. Prior periods have not been reclassified as the amounts were not material.

~~RD&A~~						Research, Data and Analytics; an LOB within MA that offers: subscription based research, data and analytical products, including credit ratings produced by MIS; credit research; quantitative credit scores and other analytical tools; economic research and forecasts; business intelligence and company information products; commercial real estate data and analytical tools; and on-line and classroom-based training services as well as credentialing and certification services

~~Redeemable Non-controlling Interest~~						Represents minority shareholders' interest in entities which are controlled but not wholly-owned by Moody's and for which Moody's obligation to redeem the minority shareholders' interest is represented by a put/call relationship


~~TERM~~						~~DEFINITION~~

~~Reform Act~~						~~Credit Rating Agency Reform Act of 2006~~

~~Regulatory Data Corporation (RDC)~~						~~A provider of anti-money laundering (AML) and know-your-customer (KYC) data and due diligence services; the Company acquired RDC in February 2020~~

~~REIT~~						~~Real Estate Investment Trust~~

~~Reis, Inc. (Reis)~~						~~A provider of U.S. commercial real estate (CRE) data; acquired by the Company in October 2018; part of the RD&A LOB and a reporting unit within the MA reportable segment.~~

~~Relationship~~Recurring Revenue						For MA, represents subscription-based revenue and software maintenance revenue. For MIS, represents recurring monitoring fees of a rated debt obligation and/or entities that issue such obligations, as well as revenue from programs such as commercial paper, medium-term notes and shelf registrations. For MIS Other, represents ~~subscription-based revenue. For MA, represents subscription-based revenue and software maintenance revenue~~financial instrument pricing services.

Reform Act						Credit Rating Agency Reform Act of 2006





Reporting unit						The level at which Moody’s evaluates its goodwill for impairment under U.S. GAAP; defined as an operating segment or one level below an operating segment

Research and Insights (R&I)						LOB within MA that provides models, scores, expert insights and commentary. This LOB includes credit research; credit models and analytics; economics data and models; and structured finance solutions

Retirement Plans						Moody’s funded and unfunded pension plans, the healthcare plans and life insurance plans

Revenue Accounting Standard						Updates to the ASC pursuant to ASU No. 2014-09, “Revenue from Contracts with Customers (ASC Topic 606).”. This ~~new~~ accounting guidance significantly ~~changes~~changed the accounting framework under U.S. GAAP relating to revenue recognition and to the accounting for the deferral of incremental costs of obtaining or fulfilling a contract with a customer

~~RiskFirst~~						~~A company providing risk analytic solutions for the asset management and pension fund communities; acquired by the Company in July 2019~~

RMBS						Residential mortgage-backed securities; an asset class within SFG

RMS						A global provider of climate and natural disaster risk modeling and analytics; acquired by the Company in September 2021

RMS Plans						The RMS 2014 Equity Award Plan and the RMS 2015 Equity Incentive Plan

ROU Asset						Assets ~~recorded pursuant to the New Lease Accounting Standard~~ which represent the Company’s right to use an underlying asset for the term of a lease

SaaS						Software-as-a-Service

SASB						Sustainability Accounting Standards Board

SEC						U.S. Securities and Exchange Commission

Second Party Opinions						An independent assessment of how debt instruments or financing frameworks align to sustainability principles and the extent to which they are expected to contribute to long-term sustainable development

Securities Act						Securities Act of 1933, as amended


SFG						Structured finance group; an LOB of MIS

SG&A						Selling, general and administrative expenses

SOC 2						A report on controls at a service organization relevant to security, availability, processing integrity, confidentiality, or privacy, as defined by the American Institute of Certified Public Accountants

SOFR						Secured Overnight Financing Rate

SSP						Standalone selling price

T&M						Time-and-Material

Tax Act						The “Tax Cuts and Jobs Act” enacted into U.S. law on December 22, 2017, which significantly ~~amends~~amended the tax code in the U.S.

TCFD						Task Force on Climate-Related Financial Disclosures


TERM						DEFINITION

~~Total Debt~~						~~All indebtedness of the Company as reflected on the consolidated balance sheets~~

Transaction Revenue						For MA, represents perpetual software license fees and revenue from software implementation services, risk management advisory projects, and training and certification services. For MIS (excluding MIS Other), represents the initial rating of a new debt issuance as well as other one-time fees. For MIS Other, represents revenue from professional services as well as data services, research and analytical engagements. For MA, represents perpetual software license fees and revenue from software implementation services, risk management advisory projects, training and certification services, and research and analytical engagements

U.K.						United Kingdom

U.K. Competition & Markets Authority						Government department in the U.K. responsible for strengthening business competition and preventing and reducing anti-competitive activities

U.S.						United States

USD						U.S. dollar

UTPs						Uncertain tax positions



VisibleRisk						A cyber risk ratings joint venture created by Moody’s and Team8, a global venture group
~~Vigeo Eiris (VE)~~						~~A provider of Environmental, Social and Governance (ESG) research, data and assessments; acquired by the Company in April 2019~~

WACC						Weighted Average Cost of Capital


~~TERM~~						~~DEFINITION~~

~~ZM Financial Systems (ZMFS)~~						~~A provider of risk and financial management software for the U.S. banking sector; acquired by the Company in December 2020~~

~~2018 Restructuring Program~~						Restructuring program approved by the chief executive officer of Moody’s on October 26, 2018. This program included relocation of certain functions from high-cost to lower-cost jurisdictions, a reduction of staff, including from acquisitions and pursuant to a review of the business criticality of certain positions, and the rationalization and exit of certain real estate leases due to consolidation of various business activities.

2020 MA Strategic Reorganization Restructuring Program						Restructuring program approved by the chief executive officer of Moody’s on December 22, 2020, relating to a strategic reorganization in the MA reportable ~~segment.~~segment

~~2020 Real Estate Rationalization~~2022 - 2023 Geolocation Restructuring Program						Restructuring program approved by the chief executive officer of Moody’s on ~~July 29, 2020, primarily in response~~June 30, 2022 relating to the ~~COVID-19 pandemic which revolves around~~Company's post-COVID-19 geolocation strategy and other strategic initiatives; includes the rationalization and exit of certain real estate ~~leases.~~leases and a reduction in staff, including the relocation of certain job functions from their current locations

~~2012 Senior Notes~~						~~Principal amount of $500 million, 4.50% senior unsecured notes due in September 2022~~

~~2013 Senior Notes~~						~~Principal amount of $500 million, 4.875% senior unsecured notes due in February 2024~~

~~2014 Senior Notes~~						~~Principal amount of $600 million, 5.25% senior unsecured notes due in July 2044~~

~~2015 Senior Notes~~						~~Principal amount of €500 million, 1.75% senior unsecured notes due in March 2027~~

~~2017 Senior Notes Due 2023~~						~~Principal amount of $500 million, 2.625% senior unsecured notes due January 15, 2023~~

~~2017 Senior Notes Due 2028~~						~~Principal amount of $500 million, 3.25% senior unsecured notes due January 15, 2028~~

~~2017 Senior Notes Due 2021~~						~~Principal amount of $500 million, 2.75% senior unsecured notes originally due in December 2021, but early repaid by the Company in 2020.~~

~~2018 Facility~~						~~Five-year unsecured revolving credit facility, with capacity to borrow up to $1 billion; backstops CP issued under the CP Program~~

~~2018 Senior Notes~~						~~Principal amount of $300 million, 3.25% senior unsecured notes originally due in June 2021, but early repaid by the Company in 2020.~~

~~2018 Senior Notes Due 2029~~						~~Principal amount of $400 million, 4.25% senior unsecured notes due February 1, 2029~~

~~2018 Senior Notes Due 2048~~						~~Principal amount of $400 million, 4.875% senior unsecured notes due December 17, 2048~~

~~2019 Senior Notes~~						~~Principal amount of €750 million, 0.950% senior unsecured notes due in February 25, 2030~~

~~2020 Senior Notes Due 2025~~						~~Principal amount of $700 million, 3.75% senior unsecured notes due March 24, 2025~~

~~2020 Senior Notes Due 2050~~						~~Principal amount of $300 million, 3.25% senior unsecured notes due May 20, 2050~~

~~2020 Senior Notes Due 2060~~						~~Principal amount of $500 million, 2.55% senior unsecured notes due August 18, 2060~~

~~7WTC~~						~~The Company’s corporate headquarters located at 7 World Trade Center in New York, NY~~


What do we do?			Issue, Originate, Select, Underwrite			Identify, Measure, Monitor & Manage Risk			Verify, Comply, Plan & Report


		December 31,		Change
		2023	2022	%
MA	U.S.	2,995	2,789	7	%
	Non-U.S.	4,858	4,333	12	%
	Total	7,853	7,122	10	%
MIS	U.S.	1,490	1,538	(3)	%
	Non-U.S.	3,855	3,981	(3)	%
	Total	5,345	5,519	(3)	%
MSS	U.S.	744	741	—	%
	Non-U.S.	1,209	1,044	16	%
	Total	1,953	1,785	9	%
Total MCO	U.S.	5,229	5,068	3	%
	Non-U.S.	9,922	9,358	6	%
	Total	15,151	14,426	5	%


Global Headcount
		December 31,		Change
		2020	2019	%

MIS
	U.S.	1,512	1,453	4	%
	Non-U.S.	3,564	3,358	6	%
	Total	5,076	4,811	6	%

MA
	U.S.	2,004	1,810	11	%
	Non-U.S.	2,963	3,023	(2)	%
	Total	4,967	4,833	3	%

MSS
	U.S.	709	645	10	%
	Non-U.S.	738	792	(7)	%
	Total	1,447	1,437	1	%

Total MCO
	U.S.	4,225	3,908	8	%
	Non-U.S.	7,265	7,173	1	%
	Total	11,490	11,081	4	%


			Operational and reputational risks						Digitization
			Evolving regulatory environment						Fluctuations in credit and financial markets
			Climate change						Geopolitical risks


						Name, Age, Position and Biographical Data

						Robert Fauber, 5053 President and Chief Executive Officer Mr. Fauber has served as the Company’s President and Chief Executive Officer since January 2021. Mr. Fauber joined the Board of Directors in October 2020 and he currently serves on the Executive Committee of the Board of Directors. Prior to serving as CEO, Mr. Fauber served as Chief Operating Officer from November 2019 to December 2020, as President of ~~Moody’s Investors Service, Inc.~~MIS from June 2016 to October 2019, as Senior Vice President—Corporate & Commercial Development of Moody’s Corporation from April 2014 to May 2016, and was Head of the MIS Commercial Group from January 2013 to May 2016. From April 2009 through April 2014, he served as Senior Vice President—Corporate Development of Moody’s Corporation. Mr. Fauber served as Vice President—Corporate Development from September 2005 to April 2009. Prior to joining Moody’s, Mr. Fauber served in several roles at Citigroup and its investment banking subsidiary Salomon Smith Barney from 1999 to 2005. From 1992 to 1996, Mr. Fauber worked at NationsBank (now Bank of America) in the middle market commercial banking group.

						~~John J. Goggins, 60~~Richard Steele, 54 ~~Executive~~Senior Vice President and General Counsel Mr. ~~Goggins~~Steele has served as ~~the Company’s Executive Vice President and General Counsel since April 2011 and~~ the Company’s Senior Vice President and General Counsel ~~from October 2000 until April 2011.~~since September 2023. Mr. ~~Goggins~~Steele joined Moody’s ~~Investors Service, Inc.~~KMV Company in ~~February 1999~~2006 as ~~Vice President and Associate General Counsel.~~

						~~Melanie Hughes, 58~~ ~~Senior Vice President and~~its Chief ~~Human Resources Officer~~ ~~Ms. Hughes has served as the Company’s Senior Vice President—Chief Human Resources Officer since September 2017. Prior to joining the Company, Ms. Hughes was Chief Human Resource~~Legal Officer, and Executive Vice President, Human Resources at American Eagle Outfitters from July 2016 to September 2017 and served as Executive Vice President, Human Resources at Tribune Media from May 2013 to June 2016. She has held several senior management roles for many different companies such as Coach, Gilt Group, DoubleClick and UBS Warburg.

						~~Mark Kaye, 41~~ ~~Senior Vice President and Chief Financial Officer~~ ~~Mr. Kaye has served as the Company’s Senior Vice President—Chief Financial Officer since August 2018.~~was named General Counsel of Moody’s Analytics in January 2008. Prior to joining the Company, Mr. ~~Kaye~~Steele was ~~Senior Vice President~~a corporate lawyer at Wilson Sonsini Goodrich & Rosati, and Head of Financial Planning and Analysis at Massachusetts Mutual Life Insurance Company (MassMutual) since February 2016, and Chief Financial Officer of MassMutual U.S. since July 2015. Prior to that, Mr. Kaye served as Chief Financial Officer and Senior Vice President, Retirement Solutions, at Voya Financial from 2011 to 2015. Mr. Kaye previouslyalso held ~~various~~ senior ~~financial and risk reporting~~legal positions at ~~ING U.S.~~several firms in financial technology, software and ~~ING Group, and was in the investment banking division of Credit Suisse First Boston.~~venture capital.


						Name, Age, Position and Biographical Data

						Caroline Sullivan, 5255 ~~Senior Vice President~~Interim Chief Financial Officer, Chief Accounting Officer and Corporate Controller Ms. Sullivan has served as the Company’s ~~Senior Vice President—~~Chief Accounting Officer and Corporate Controller since December ~~2018.~~2018 and has served as the Interim Chief Financial Offer since September 2023. Prior to joining the Company, Ms. Sullivan served in several roles at Bank of America from 2011 to 2018, where her last position held was Managing Director and Global Banking Controller. Prior to that role, Ms. Sullivan supported the Global Wealth & Investment Management business from 2015 to 2017 in a variety of positions, including Controller. Ms. Sullivan, a CPA, previously held various senior positions at several banks and a major accounting ~~firm, and is a member of the Board of Directors of Financial Executives International.~~firm.

						Stephen Tulenko, 5356 President, Moody’s Analytics Mr. Tulenko has served as President of Moody’s Analytics since November 2019. Mr. Tulenko served as Executive Director of ~~Enterprise Risk Solutions~~ERS from 2013 to October 2019 and as Executive Director of Global Sales, Customer Service and Marketing from 2008 to 2013. Prior to the formation of Moody’s Analytics, he held various sales, product development and product strategy roles at Moody’s Investors Service, Inc. Mr. Tulenko joined Moody’s in 1990.

						Michael West, 5255 President, Moody’s Investors Service Mr. West has served as President of Moody’s Investors Service, Inc. since November 2019. Mr. West served as Managing Director—Head of MIS Ratings and Research from June 2016 to October 2019. Previously, Mr. West served as Managing Director—Head of Global Structured Finance from February 2014 to May 2016 and Managing Director—Head of Global Corporate Finance from January 2010 to January 2014. Earlier in his career, he was also responsible for the research strategy for the ratings businesses and before that led Corporate Finance for the EMEA Region, European Corporates and the EMEA leveraged finance business. ~~Prior to joining Moody’s in 1998, Mr. West worked at Bank of America and HSBC in various credit roles.~~


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares That May Yet Be Purchased Under The Program (2)
October 1- 31	2,306	$	—	—	$1,081 million
November 1- 30	396,164	$	277.73	395,735	$971 million
December 1- 31	511,332	$	278.92	502,196	$831 million
Total	909,802	$	278.40	897,931


Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (2)		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding Securities Reflected in Column (a))
	(a)		(b)		(c)
Equity compensation plans approved by security holders	3,167,939	(1)	$	133.95	17,620,777	(3)
Equity compensation plans not approved by security holders	—		$	—	—
Total	3,167,939		$	133.95	17,620,777


	Year Ended December 31,
	2015		2016		2017		2018		2019		2020
Moody’s Corporation	$	100.00	$	95.41	$	151.24	$	145.03	$	248.37	$	306.18
S&P 500 Composite Index	$	100.00	$	111.96	$	136.40	$	130.42	$	171.49	$	203.04
Russell 3000—Financial Services Index	$	100.00	$	117.96	$	141.49	$	129.67	$	172.37	$	183.75


			Sensitivity Analysis
			Deficit Caused by a Hypothetical Reduction to Fair Value
	Goodwill		10		%	20		%	30		%	40		%
MIS	$	99	$	—		$	—		$	—		$	—
Content	381		—			—			—			—
ERS	800		—			—			—			—
MALS	127		—			—			(12)			(37)
ICRA	212		—			(2)			(44)			(85)
Bureau van Dijk	2,746		—			—			—			(266)
Reis	191		—			(22)			(48)			(74)
Totals	$	4,556	$	—		$	(24)		$	(104)		$	(462)


(dollars in millions)	Assumptions Used for 2021		Estimated Impact on 2021 Income before Provision for Income Taxes (Decrease)/Increase
Weighted Average Discount Rates (1)	2.24%/2.30%		$	(11)
Weighted Average Assumed Compensation Growth Rate	3.62	%	$	2
Assumed Long-Term Rate of Return on Pension Assets	5.45	%	$	(5)


(dollars in millions)	Assumptions Used for 2024	Estimated Impact on 2024 Income before Provision for Income Taxes (Decrease)/Increase
Weighted Average Discount Rates (1)	4.73%/4.75%	$	(4)
Weighted Average Assumed Compensation Growth Rate	3.60%	$	1
Assumed Long-Term Rate of Return on Pension Assets	6.10%	$	(5)


–~~Vigeo Eiris on April 12, 2019;~~			–~~Regulatory DataCorp on February 13, 2020;~~
–~~Four Twenty Seven on July 22, 2019;~~			–~~Acquire Media on October 21, 2020;~~
–~~RiskFirst on July 25, 2019;~~
–~~ABS Suite on October 1, 2019;~~


		Year Ended December 31,
	Year Ended December 31,
Financial measure:
Financial measure:
Financial measure:	Financial measure:	2020			2019			% Change Favorable / (Unfavorable)		Insight and Key Drivers of Change Compared to Prior Year	2023		2022			% Change Favorable / (Unfavorable)			Insight and Key Drivers of Change Compared to Prior Year
Moody's total revenue	Moody's total revenue	$	5,371		$	4,829		11	%	— reflects strong growth in both segments	Moody's total revenue	$	5,916		$	5,468		8	8	%	— reflects growth in both segments
MIS External Revenue		$	3,292		$	2,875		15	%	— primary driver of growth reflects higher corporate debt issuance (both investment-grade and high-yield) as issuers bolstered liquidity positions in response to COVID-19 uncertainties and issued opportunistically for refinancing needs
MA External Revenue		$	2,079		$	1,954		6	%	— strong renewals and new sales of credit research and data feeds, as well as demand for KYC and compliance solutions; — demand for insurance compliance products along with credit assessment and loan origination solutions in ERS; and — inorganic growth from acquisitions.
MA external revenue											MA external revenue	$	3,056		$	2,769		10		%	— sustained demand for KYC solutions, as well as continued growth from insurance products and SaaS-based banking offerings; — ongoing strong retention for ratings data feeds; and — elevated usage and demand for credit and economic research
MIS external revenue											MIS external revenue	$	2,860		$	2,699		6		%	— increased investment-grade/speculative-grade corporate debt issuance coupled with higher infrastructure finance issuance relative to suppressed activity in the prior year; and — increases in banking-related revenue mainly due to favorable mix of infrequent issuers, as well as higher issuance volumes; partially offset by — declines across most asset classes in SFG reflecting a decrease in securitization activity amidst capital market volatility
Total operating and SG&A expenses	Total operating and SG&A expenses	$	2,704		$	2,554		(6	%)	— additional compensation expense resulting from hiring activity and merit increases coupled with higher incentive compensation aligned with financial and operating performance; — higher costs to support strategic initiatives to enhance technology infrastructure to enable automation, innovation and efficiency as well as to support business growth; partially offset by: — lower travel costs and disciplined expense management in light of the COVID-19 crisis coupled with benefits from the 2018 Restructuring Program	Total operating and SG&A expenses	$	3,319		$	3,140		(6	(6	%)	— higher incentive compensation accruals and performance-based equity compensation aligned with actual/expected financial and operating performance; and — higher salaries and benefits, primarily reflecting hiring and salary increases in MA to support business growth

										Depreciation and amortization												Depreciation and amortization	$	373	$	331	(13	%)	— higher amortization relating to internally developed software, primarily related to the development of MA SaaS solutions
Restructuring	Restructuring	$	50		$	60		17	%	— charges are pursuant to the Company's restructuring programs, more fully discussed in Note 11 to the consolidated financial statements	Restructuring	$	87		$	114		24	24	%	— relates to the Company's 2022 - 2023 Geolocation Restructuring Program, more fully discussed in Note 11 to the consolidated financial statements

Total non-operating (expense) income, net											Total non-operating (expense) income, net	$	(202)		$	(123)		(64		%)	— higher realized losses of $81 million on fixed-to-floating interest rate swaps resulting from higher interest rates (more fully discussed in Note 7 to the consolidated financial statements); — a $70 million gain on extinguishment of debt in in the prior year; and — a $20 million net increase in foreign exchange losses recorded during the year; partially offset by — an increase in interest income of $48 million related to higher cash balances and interest yields; — higher gains on certain of the Company's investments of $28 million; and — a $22 million benefit related to the resolutions of tax matters in the first quarter of 2023
Operating Margin	Operating Margin	44.5		%	41.4		%	310BPS		— margin expansion reflects strong revenue growth partially offset by growth in operating expenses	Operating Margin	36.1		%	34.4		%	170BPS			— operating margin and Adjusted Operating Margin(1) expansion is primarily due to revenue growth, partially offset by increases in operating and SG&A costs
Adjusted Operating Margin		49.7		%	47.4		%	230BPS
Adjusted Operating Margin(1)											Adjusted Operating Margin(1)	43.9		%	42.6		%	130BPS			— operating margin and Adjusted Operating Margin(1) expansion is primarily due to revenue growth, partially offset by increases in operating and SG&A costs
ETR	ETR	20.3		%	21.0		%	70BPS		— decrease primarily due to a deferred tax benefit in 2020 resulting from a non-U.S. corporate reorganization	ETR	16.9		%	21.9		%	500BPS
Diluted EPS	Diluted EPS	$	9.39		$	7.42		27	%	— increase reflects strong operating income/Adjusted Operating Income growth as described above	Diluted EPS	$	8.73		$	7.44		17	17	%	— increase in Diluted EPS and Adjusted Diluted EPS(1) is mostly attributable to growth in operating income/Adjusted Operating Income(1) coupled with a $0.76/share benefit related to the resolutions of tax matters in the first quarter of 2023, compared to $0.12/share for similar matters in the first quarter of 2022
Adjusted Diluted EPS		$	10.15		$	8.29		22	%
Adjusted Diluted EPS(1)											Adjusted Diluted EPS(1)	$	9.90		$	8.57		16		%	— increase in Diluted EPS and Adjusted Diluted EPS(1) is mostly attributable to growth in operating income/Adjusted Operating Income(1) coupled with a $0.76/share benefit related to the resolutions of tax matters in the first quarter of 2023, compared to $0.12/share for similar matters in the first quarter of 2022


	Year Ended December 31,						% Change Favorable (Unfavorable)
	2020			2019
Revenue:
United States	$	2,955		$	2,544		16	%
Non-U.S.:
EMEA	1,545			1,446			7	%
Asia-Pacific	571			551			4	%
Americas	300			288			4	%
Total Non-U.S.	2,416			2,285			6	%
Total	5,371			4,829			11	%
Expenses:
Operating	1,475			1,387			(6	%)
SG&A	1,229			1,167			(5	%)
Restructuring	50			60			17	%
Depreciation and amortization	220			200			(10	%)
Acquisition-Related Expenses	—			3			100	%
Loss pursuant to the divestiture of MAKS	9			14			36	%
Total	2,983			2,831			(5	%)
Operating income	2,388			1,998			20	%
Adjusted Operating Income (1)	2,667			2,291			16	%
Interest expense, net	(205)			(208)			1	%
Other non-operating income, net	46			20			130	%
Non-operating (expense) income, net	(159)			(188)			15	%
Net income attributable to Moody’s	$	1,778		$	1,422		25	%
Diluted weighted average shares outstanding	189.3			191.6			1	%
Diluted EPS attributable to Moody’s common shareholders	$	9.39		$	7.42		27	%
Adjusted Diluted EPS (1)	$	10.15		$	8.29		22	%
Operating margin	44.5		%	41.4		%
Adjusted Operating Margin (1)	49.7		%	47.4		%
Effective tax rate	20.3		%	21.0		%


Compensation expenses of $1,224 million increased $73 million primarily reflecting:			Non-compensation expenses of $463 million increased $1 million:
— an increase in incentive compensation accruals and performance-based equity compensation that aligns with actual/projected financial and operating performance; and			— expenses were generally in line with the prior year and reflective of disciplined cost management
— higher salaries and benefits that reflects hiring and salary increases, primarily in MA to support continued growth in the business.


Gain on ~~the early redemption~~extinguishment of ~~the 2018 Senior Notes and 2017 Senior Notes~~						debt


Diluted EPS in 2020 of $9.39 increased $1.97 compared to 2019, with both periods including the aforementioned restructuring charges. The growth in EPS is mainly due to the aforementioned growth in operating income.⇑ $1.29									Adjusted Diluted EPS of $10.15 in 2020 increased $1.86 compared to 2019 (refer to the section entitled “Non-GAAP Financial Measures” of this MD&A for items excluded in the derivation of Adjusted Diluted EPS). The growth in Adjusted Diluted EPS is primarily due to the aforementioned growth in Adjusted Operating Income.⇑ $1.33


MA: Global revenue ⇑ $287 million			U.S. Revenue ⇑ $109 million			Non-U.S. Revenue ⇑ $178 million


DS: Global revenue ⇑ $138 million			U.S. Revenue ⇑ $58 million			Non-U.S. Revenue ⇑ $80 million


R&I: Global revenue ⇑ $72 million			U.S. Revenue ⇑ $20 million			Non-U.S. Revenue ⇑ $52 million


D&I: Global revenue ⇑ $77 million			U.S. Revenue ⇑ $31 million			Non-U.S. Revenue ⇑ $46 million

Compensation expenses of $1,016 million increased $111 million reflecting:

Non-compensation expenses of $616 million decreased $6 million:

— an increase in incentive compensation accruals and performance-based equity compensation that aligns with actual/projected financial and operating performance; and

— expenses were generally in line with prior year and reflective of disciplined cost management

— an increase in salaries and benefits that reflects headcount growth and annual salary increases, primarily to support business growth in MA