Financial Analysis

CONTINGENCIES Given the nature of the Company's activities, Moodys 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 Companys business. Moodys 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. Moodys also is subject to ongoing tax audits as addressed in Note 4 to the consolidated financial statements. Management periodically assesses the Companys 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 l …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

INDEBTEDNESS The Companys debt is recorded at its carrying value, which represents the issuance amount plus or minus any issuance premium or discount, except for certain debt as depicted in the table below, which is recorded at the carrying value adjusted for the fair value of an interest rate swap used to hedge the fair value of the note. The following table summarizes total indebtedness: June 30, 2026 Notes Payable: Principal Amount Fair Value of Interest Rate Swaps (1) Unamortized (Discount) Premium Unamortized Debt Issuance Costs Carrying Value 5.25% 2014 Senior Notes, due 2044 $ 600 $ (19) $ 3 $ (4) $ 580 1.75% 2015 Senior Notes, due 2027 571 571 3.25% 2017 Senior Notes, due 2028 500 (1) (1) 498 4.25% 2018 Senior Notes, due 2029 400 (22) (1) (1) 376 4.875% 2018 Senior Notes, due 2048 400 (22) (6) (3) 369 0.950% 2019 Senior Notes, due 2030 857 (1) (2) 854 3.25% 2020 Senior Notes, due 2050 300 (4) (2) 294 2.55% 2020 Senior Notes, due 2060 300 (2) (3) 295 2.00% 2021 Senior Notes, due 2031 600 (4) (3) 593 2.75% 2021 Senior Notes, due 2041 600 (11) (4) 585 3.10% 2021 Senior Notes, due 2061 500 (6) (5) 489 3.75% 2022 Senior Notes, due 2052 500 (31) (8) (4) 457 4.25% 2022 Senior Notes, due 2032 500 (4) (1) (2) 493 5.00% 2024 Senior Notes, due 2034 500 (4) (4) 492 Total debt $ 7,128 $ (98) $ (46) $ (38) $ 6,946 Current portion (571) Total long-term debt $ 6,375 December 31, 2025 Notes Payable: Principal Amount Fair Value of Interest Rate Swaps (1) Unamortized (Discount) Premium …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table presents the Companys revenues disaggregated by LOB: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 MA: Decision Solutions (DS) Banking $ 119 $ 138 $ 252 $ 279 Insurance 183 168 364 331 KYC 121 107 239 208 Total DS 423 413 855 818 Research and Insights (R&I) 256 249 511 485 Data and Information (D&I) 246 226 485 444 Total external revenue 925 888 1,851 1,747 Intersegment revenue 3 3 6 6 Total MA 928 891 1,857 1,753 MIS: Corporate Finance (CFG) Investment-grade 186 142 406 307 High-yield 113 85 201 152 Bank loans 147 98 286 258 Other accounts (1) 205 187 391 359 Total CFG 651 512 1,284 1,076 Structured Finance (SFG) Asset-backed securities 45 35 83 70 RMBS 35 29 67 55 CMBS 25 25 47 53 Structured credit 45 46 89 94 Other accounts 1 2 1 Total SFG 151 135 288 273 Financial Institutions (FIG) Banking 148 120 282 250 Insurance 47 54 85 99 Managed investments 23 13 41 26 Other accounts 4 4 8 7 Total FIG 222 191 416 382 Public, Project and Infrastructure Finance (PPIF) Public finance / sovereign 82 75 156 147 Project and infrastructure 142 87 244 178 Total PPIF 224 162 400 325 Total ratings revenue 1,248 1,000 2,388 2,056 MIS Other 12 10 25 19 Total external revenue 1,260 1,010 2,413 2,075 Intersegment revenue 52 50 103 99 Total MIS 1,312 1,060 2,516 2,174 Eliminations (55) (53) (109) (105) Total MCO $ 2,185 $ 1,898 $ 4,264 $ 3,822 (1) Other includes: recurring monitoring fees of a rated debt obligation and/or entities that issue …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

STOCK-BASED COMPENSATION Presented below is a summary of the stock-based compensation cost and associated tax benefit included in the accompanying consolidated statements of operations: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Stock-based compensation cost $ 60 $ 61 $ 117 $ 118 Tax benefit $ 13 $ 13 $ 26 $ 25 During the first half of 2026, the Company granted 0.1 million employee stock options, which had a weighted average grant date fair value of $133.17 per share. The Company also granted 0.5 million shares of restricted stock in the first half of 2026, which had a weighted average grant date fair value of $443.74 per share. Both the employee stock options and restricted stock generally vest ratably over four years. Additionally, the Company granted 0.1 million shares of performance-based awards whereby the number of shares that ultimately vest is based on the achievement of certain non-market-based performance metrics of the Company over three years. The weighted average grant date fair value of these awards was $431.10 per share. The following weighted average assumptions were used in determining the fair value using the Black-Scholes option-pricing model for options granted in 2026: Expected dividend yield 0.93 % Expected stock volatility 27 % Risk-free interest rate 3.74 % Expected holding period 5.7 years Unrecognized stock-based compensation expense at June 30, 2026 was $13 million and $354 million for unvested stock options and restri …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

FAIR VALUE The tables below present information about items that are carried at fair value at June 30, 2026 and December 31, 2025: Fair Value Measurement as of June 30, 2026 Description Balance Level 1 Level 2 Assets: Derivatives (1) $ 6 $ $ 6 Money market funds/mutual funds 251 251 Total $ 257 $ 251 $ 6 Liabilities: Derivatives (1) $ 487 $ $ 487 Total $ 487 $ $ 487 Fair Value Measurement as of December 31, 2025 Description Balance Level 1 Level 2 Assets: Derivatives (1) $ 9 $ $ 9 Money market funds/mutual funds 113 113 Total $ 122 $ 113 $ 9 Liabilities: Derivatives (1) $ 540 $ $ 540 Total $ 540 $ $ 540 (1) Represents fair value of certain derivative contracts as more fully described in Note 7 to the consolidated financial statements. The following are descriptions of the methodologies utilized by the Company to estimate the fair value of its derivative contracts, money market mutual funds and mutual funds: Derivatives: In determining the fair value of the derivative contracts in the table above, the Company utilizes industry standard valuation models. Where applicable, these models project future cash flows and discount the future amounts to a present value using spot rates, forward points, currency volatilities, interest rates as well as the risk of non-performance of the Company and the counterparties with whom it has derivative contracts. The Company established strict counterparty credit guidelines and only enters into transactions with financial institutions that adhere …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS The following table summarizes the activity in goodwill for the periods indicated: Six Months Ended June 30, 2026 MA MIS Consolidated Gross goodwill Accumulated impairment charge Net goodwill Gross goodwill Accumulated impairment charge Net goodwill Gross goodwill Accumulated impairment charge Net goodwill Balance at beginning of year $ 5,997 $ (12) $ 5,985 $ 383 $ $ 383 $ 6,380 $ (12) $ 6,368 Additions/ adjustments (1) 32 32 32 32 Foreign currency translation adjustments (75) (75) (14) (14) (89) (89) Adjustment related to divestiture of business (2) 7 7 7 7 Ending balance $ 5,929 $ (12) $ 5,917 $ 401 $ $ 401 $ 6,330 $ (12) $ 6,318 Year Ended December 31, 2025 MA MIS Consolidated Gross goodwill Accumulated impairment charge Net goodwill Gross goodwill Accumulated impairment charge Net goodwill Gross goodwill Accumulated impairment charge Net goodwill Balance at beginning of year $ 5,626 $ (12) $ 5,614 $ 380 $ $ 380 $ 6,006 $ (12) $ 5,994 Additions/ adjustments (3) 135 135 8 8 143 143 Foreign currency translation adjustments 334 334 (5) (5) 329 329 Reclassification to assets held-for-sale (2) (89) (89) (89) (89) Divestiture of business (4) (9) (9) (9) (9) Ending balance $ 5,997 $ (12) $ 5,985 $ 383 $ $ 383 $ 6,380 $ (12) $ 6,368 (1) The 2026 additions relate to the acquisitions of Fintellix and MERIS in 2026. (2) The 2025 reclassification to assets held for sale for the MA segment relates to the divestiture of the MA Regulatory Sol …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES Moodys ETR was 24.9% and 25.0% for the three months ended June 30, 2026 and 2025, respectively, and was 24.5% and 23.6% for the six months ended June 30, 2026 and 2025, respectively. The increase in the ETR for the six months ended June 30, 2026 compared to the same period in the prior year of 0.9% primarily reflects lower Excess Tax Benefits from stock-based compensation in the current year. The Companys year-to-date provision for income taxes is computed by applying its estimated annual ETR to the pre-tax earnings, including the impact of the Excess Tax Benefits on stock-based compensation of $19 million. The Company classifies interest related to UTPs in interest expense, net in its consolidated statements of operations. Penalties, if incurred, would be recognized in other non-operating income, net. The Company had a net increase in its UTP reserves of $6 million ($5 million, net of federal tax) during the second quarter of 2026 and an increase of $12 million ($10 million, net of federal tax) during the first six months of 2026. Moodys is subject to U.S. federal income tax as well as income tax in various state, local and foreign jurisdictions. The Companys U.S. federal income tax returns for 2022 through 2024 remain open to examination. Currently, the Company's New York State tax returns for 2022 through 2024 are under examination. Additionally, New York City tax returns for the years 2018 through 2022 are also under examination, while returns for 2023 and 20 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEASES The Company has operating leases, substantially all of which relate to the lease of office space. The Companys leases which are classified as finance leases are not material to the consolidated financial statements. Certain of the Companys leases include options to renew, with renewal terms that can extend the lease term from one year to 20 years at the Companys discretion. The following table presents the components of the Companys lease cost: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Operating lease cost $ 24 $ 22 $ 47 $ 44 Sublease income (1) (2) (3) (4) Variable lease cost 5 6 11 10 Total lease cost $ 28 $ 26 $ 55 $ 50 The following tables present other information related to the Companys operating leases: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cash paid for amounts included in the measurement of operating lease liabilities $ 25 $ 31 $ 51 $ 61 Right-of-use assets obtained in exchange for new operating lease liabilities $ 249 $ 26 $ 268 $ 47 June 30, 2026 June 30, 2025 Weighted-average remaining lease term 11.7 Years 4.0 Years Weighted-average discount rate applied to operating leases 5.2 % 3.5 % The following table presents a maturity analysis of the future minimum lease payments included within the Companys operating lease liabilities at June 30, 2026: Year Ending December 31, Operating Leases 2026 (After June 30,) $ 51 2027 25 2028 66 2029 70 2030 65 After 2030 561 Total lease payments (undiscount …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"Recently Issued Accounting Standards In November 2024, the FASB issued ASU 2024-03, ""Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses"" (""ASU No. 2024-03""). The amendments in this ASU require more detailed disclosures about specific expense categories in the notes to financial statements (including employee compensation, depreciation and intangible asset amortization) and apply to both interim and annual reporting periods. ASU No. 2024-03 also requires disclosure of total selling expenses for both interim and annual reporting periods, with an additional requirement to provide an entitys definition of selling expenses in annual reporting. This ASU is effective in fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU should be applied either (1) prospectively for annual and interim reporting periods beginning after the aforementioned effective dates or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures. In September 2025, the FASB issued ASU 2025-06 ""IntangiblesGoodwill and OtherInternal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software"" (""ASU No. 20 …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

RESTRUCTURING On December 19, 2024, the CEO of Moodys approved the Strategic and Operational Efficiency Restructuring Program, the scope of which was expanded in July 2026. The Company currently estimates that upon completion, the program will result in annualized savings of $300 million to $350 million. This program relates to the Company's strategy to realign its operations toward high priority growth areas and to foster operating efficiency/leverage via simplification of organizational structures and technology enablement. This program will primarily include a reduction in staff, the rationalization and exit of certain leased office spaces, the retirement of certain legacy software applications, and the exit of certain businesses and product offerings, including the divestiture of the MA Regulatory Solutions business. The program includes $285 million to $330 million of expected pre-tax personnel and related restructuring charges, an amount that includes severance and other costs primarily determined under the Company's existing severance plans, expense related to the modification of equity awards, and additional costs to support the execution of the restructuring program. In addition, the program is expected to result in $5 million of non-cash charges from the exit from certain leased office spaces and $10 million to $15 million of non-cash charges related to incremental amortization of internally developed software due to a reduction in the useful life of the software as …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

REVENUES Revenue by Category The following table presents the Companys revenues disaggregated by LOB: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 MA: Decision Solutions (DS) Banking $ 119 $ 138 $ 252 $ 279 Insurance 183 168 364 331 KYC 121 107 239 208 Total DS 423 413 855 818 Research and Insights (R&I) 256 249 511 485 Data and Information (D&I) 246 226 485 444 Total external revenue 925 888 1,851 1,747 Intersegment revenue 3 3 6 6 Total MA 928 891 1,857 1,753 MIS: Corporate Finance (CFG) Investment-grade 186 142 406 307 High-yield 113 85 201 152 Bank loans 147 98 286 258 Other accounts (1) 205 187 391 359 Total CFG 651 512 1,284 1,076 Structured Finance (SFG) Asset-backed securities 45 35 83 70 RMBS 35 29 67 55 CMBS 25 25 47 53 Structured credit 45 46 89 94 Other accounts 1 2 1 Total SFG 151 135 288 273 Financial Institutions (FIG) Banking 148 120 282 250 Insurance 47 54 85 99 Managed investments 23 13 41 26 Other accounts 4 4 8 7 Total FIG 222 191 416 382 Public, Project and Infrastructure Finance (PPIF) Public finance / sovereign 82 75 156 147 Project and infrastructure 142 87 244 178 Total PPIF 224 162 400 325 Total ratings revenue 1,248 1,000 2,388 2,056 MIS Other 12 10 25 19 Total external revenue 1,260 1,010 2,413 2,075 Intersegment revenue 52 50 103 99 Total MIS 1,312 1,060 2,516 2,174 Eliminations (55) (53) (109) (105) Total MCO $ 2,185 $ 1,898 $ 4,264 $ 3,822 (1) Other includes: recurring monitoring fees of a rated debt obligati …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

SEGMENT INFORMATION The Company is organized into two operating segments: MA and MIS and accordingly, the Company reports in two reportable segments: MA and MIS. Revenue for MA and expenses for MIS include an intersegment fee charged to MIS from MA for certain MA products and services utilized in MISs ratings process. Additionally, revenue for MIS and expenses for MA include intersegment fees charged to MA for the rights to use and distribute content, data and products developed by MIS. These intersegment fees are generally based on the market value of the products and services being transferred between the segments. Overhead expenses include costs such as rent and occupancy, information technology and support staff such as finance, human resources and legal. Such costs and corporate expenses that exclusively benefit one segment are fully charged to that segment. For overhead costs and corporate expenses that benefit both segments, costs are generally allocated to each segment based on historical/budgeted revenue amounts. Eliminations in the following table represent intersegment revenue/expense. Moodys does not report the Companys assets by reportable segment, as this metric is not used by the CODM to allocate resources to the segments. Consequently, it is not practical to show assets by reportable segment. Financial Information by Segment The table below shows revenue, significant expenses regularly provided to the CODM and Adjusted Operating Income by reportable segment. T …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing