Moody's MCO · USD

SEGMENT INFORMATIONThe Company is organized into two operating segments: MA and MIS and accordingly, the Company reports in two reportable segments: MA and MIS.The MA segment develops a wide range of products and services that support the risk management activities of institutional participants in global financial markets. The MA segment consists of three LOBs - DS, R&I, and D&I.The MIS segment consists of five LOBs. The CFG, FIG, PPIF and SFG LOBs generate revenue principally from fees for the assignment and ongoing monitoring of credit ratings on debt obligations and the entities that issue such obligations in markets worldwide. The MIS Other LOB primarily consists of financial instruments pricing services in the Asia-Pacific region, ICRA non-ratings revenue and revenue from providing professional services.Revenue for MA and expenses for MIS include an intersegment fee charged to MIS from MA for certain MA products and services utilized in MIS’s ratings process. Additionally, revenue for MIS and expenses for MA include intersegment fees charged to MA for the rights to use and distribute content, data and products developed by MIS. These intersegment fees are generally based on the market value of the products and services being transferred between the segments.Overhead expenses include costs such as rent and occupancy, information technology and support staff such as finance, human resources and legal. Such costs and corporate expenses that exclusively benefit one segment are fully charged to that segment. For overhead costs and corporate expenses that benefit both segments, costs are generally allocated to each segment based on historical and forecasted current year revenue amounts. “Eliminations” in the following table represent intersegment revenue/expense. Moody’s does not report the Company’s assets by reportable segment, as this metric is not used by the chief operating decision maker to allocate resources to the segments.Financial Information by SegmentThe table below presents revenue, significant expenses regularly provided to the CODM and Adjusted Operating Income by reportable segment. The CODM, identified as the Company's CEO, utilizes the Adjusted Operating Income measure to assess the profitability of the Company and each of its reportable segments each quarter. Adjusted Operating Income is also used in our budgeting and forecasting processes, enabling the allocation of capital resources across the Company's strategic initiatives.

REVENUESRevenue by CategoryThe following table presents the Company’s revenues disaggregated by LOB:Year Ended December 31,202520242023MA:Decision Solutions (DS)Banking$569 $551 $521 Insurance685 598 550 KYC438 367 312 Total DS1,692 1,516 1,383 Research and Insights (R&I)995 926 884 Data and Information (D&I)912 853 789 Total external revenue3,599 3,295 3,056 Intersegment revenue12 13 13 Total MA3,611 3,308 3,069 MIS:Corporate finance (CFG)Investment-grade573 488 335 High-yield324 285 150 Bank loans503 527 292 Other accounts (1)732 650 627 Total CFG2,132 1,950 1,404 Structured finance (SFG)Asset-backed securities142 130 121 RMBS111 98 92 CMBS99 94 60 Structured credit202 193 129 Other accounts (SFG)4 3 3 Total SFG558 518 405 Financial institutions (FIG)Banking500 450 378 Insurance186 214 123 Managed investments59 49 32 Other accounts (FIG)14 14 12 Total FIG759 727 545 Public, project and infrastructure finance (PPIF)Public finance / sovereign275 240 205 Project and infrastructure360 324 271 Total PPIF635 564 476 Total ratings revenue4,084 3,759 2,830 MIS Other35 34 30 Total external revenue4,119 3,793 2,860 Intersegment royalty198 193 186 Total MIS4,317 3,986 3,046 Eliminations(210)(206)(199)Total MCO$7,718 $7,088 $5,916 (1)Other includes: recurring monitoring fees of a rated debt obligation and/or entities that issue such obligations as well as fees from programs such as commercial paper, medium term notes, and ICRA corporate finance revenue.The following table presents the Company’s revenues disaggregated by LOB and geographic area:Year Ended December 31, 2025Year Ended December 31, 2024Year Ended December 31, 2023U.S.Non-U.S.TotalU.S.Non-U.S.TotalU.S.Non-U.S.

INDEBTEDNESSThe Company’s debt is recorded at its carrying amount, which represents the issuance amount plus or minus any issuance premium or discount, except for certain debt as depicted in the table below, which is recorded at the carrying amount adjusted for the fair value of an interest rate swap used to hedge the fair value of the note.The following table summarizes total indebtedness:December 31, 2025Notes Payable:Principal AmountFair Value of Interest Rate Swaps(1)Unamortized (Discount) PremiumUnamortized Debt Issuance CostsCarrying Value5.25% 2014 Senior Notes, due 2044$600 $(18)$3 $(4)$581 1.75% 2015 Senior Notes, due 2027587 — — — 587 3.25% 2017 Senior Notes, due 2028500 — (1)(1)498 4.25% 2018 Senior Notes, due 2029400 (19)(1)(1)379 4.875% 2018 Senior Notes, due 2048400 (21)(6)(3)370 0.950% 2019 Senior Notes, due 2030881 — (2)(3)876 3.25% 2020 Senior Notes, due 2050300 — (4)(3)293 2.55% 2020 Senior Notes, due 2060300 — (2)(3)295 2.00% 2021 Senior Notes, due 2031600 — (5)(3)592 2.75% 2021 Senior Notes, due 2041600 — (11)(4)585 3.10% 2021 Senior Notes, due 2061500 — (7)(5)488 3.75% 2022 Senior Notes, due 2052500 (23)(8)(4)465 4.25% 2022 Senior Notes, due 2032500 (3)(1)(3)493 5.00% 2024 Senior Notes, due 2034500 — (4)(4)492 Total debt$7,168 $(84)$(49)$(41)$6,994 December 31, 2024Notes Payable:Principal AmountFair Value of Interest Rate Swaps (1)Unamortized (Discount) PremiumUnamortized Debt Issuance CostsCarrying Value5.25% 2014 Senior Notes, due 2044$600 $(32)$3 $(4)$567 1.75% 2015 Senior Notes due 2027518 — — (1)517 3.25% 2017 Senior Notes, due 2028500 (13)(2)(1)484 4.25% 2018 Senior Notes, due 2029400 (35)(1)(1)363 4.875% 2018 Senior Notes, due 2048400 (35)(6)(3)356 0.950% 2019 Senior Notes, due 2030776 — (1)(3)772 3.75% 2020 Senior Notes, due 2025700 (3)— — 697 3.25% 2020 Senior Notes, due 2050300 — (4)(3)293 2.55% 2020 Senior Notes, due 2060300 — (2)(3)295 2.00% 2021 Senior Notes, due 2031600 — (6)(4)590 2.75% 2021 Senior Notes, due 2041600 — (12)(5)583 3.10% 2021 Senior Notes, due 2061500 — (7)(5)488 3.75% 2022 Senior Notes, due 2052500 (43)(8)(5)444 4.25% 2022 Senior Notes, due 2032500 (8)(2)(3)487 5.00% 2024 Senior Notes, due 2034500 — (4)(4)492 Total long-term debt$7,694 $(169)$(52)$(45)$7,428 Current portion(697)Total long-term debt$6,731 (1)The fair value of interest rate swaps in the tables above represents the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged debt.

INCOME TAXESComponents of the Company’s income tax provision are as follows:Year Ended December 31,202520242023Current:Federal$231 $280 $76 State and Local99 106 67 Non-U.S.355 316 222 Total current685 702 365 Deferred:Federal35 (21)(14)State and Local8 (6)(4)Non-U.S.(60)(35)(20)Total deferred(17)(62)(38)Total provision for income taxes$668 $640 $327 A reconciliation of the U.S. federal statutory tax rate to the Company’s ETR on income before provision for income taxes is as follows:Year Ended December 31,202520242023U.S. statutory tax rate$657 21.0 %$567 21.0 %$406 21.0 %State and local taxes, net of federal tax benefit (1)93 3.0 %74 2.7 %49 2.5 %Net U.S. tax effect of cross-border tax laws(4)(0.1)%(14)(0.5)%2 0.1 %Other nontaxable or nondeductible items30 1.0 %22 0.9 %4 0.2 %Excess tax benefits on share-based payments(33)(1.1)%(27)(1.0)%(15)(0.8)%Tax credits - research credit(12)(0.4)%(15)(0.6)%(19)(0.9)%Domestic state and local income taxes, net of federal effect731 23.4 %607 22.5 %427 22.1 %Foreign Tax ExpenseBelgium Innovation deduction(37)(1.2)%(25)(0.9)%(26)(1.3)% Other15 0.4 %3 0.1 %10 0.5 %United Kingdom11 0.4 %34 1.3 %25 1.2 %Other foreign jurisdictions3 0.1 %1 — %7 0.4 %Tax expense (benefit) relating to foreign operations(8)(0.3)%13 0.5 %16 0.8 %Changes in unrecognized tax benefits(55)(1.8)%20 0.7 %(116)(6.0)%Total$668 21.3 %$640 23.7 %$327 16.9 %(1) For all years presented, state taxes in California, New York and New York City made up the majority (greater than 50 percent) of the tax effect in this category.Components of the Company’s income tax paid are as follows:Year Ended December 31,202520242023U.S. Federal$353 $223 $59 U.S. State and Local132 88 23 Total U.S.485 311 82 Belgium32 39 32 Canada68 63 44 Germany43 30 35 United Kingdom79 93 64 Other foreign jurisdictions118 77 87 Total non-U.S.340 302 262 Total Income Tax Paid$825 $613 $344 The source of income before provision for income taxes is as follows:Year Ended December 31,202520242023U.S.$1,743 $1,446 $892 Non-U.S.

STOCK-BASED COMPENSATION PLANSUnder the 1998 Plan, 33.0 million shares of the Company’s common stock have been reserved for issuance. The 2001 Plan, which is shareholder approved, permits the granting of up to 54.6 million shares, of which not more than 10.7 million shares are available for grants of awards other than stock options. The stock plans also provide for the granting of restricted stock. The stock plans provide that options are exercisable not later than ten years from the grant date. The vesting period for awards under the stock plans is generally determined by the Board at the date of the grant and has been four years except for employees who are at or near retirement eligibility, as defined, for which vesting is between one and four years. Additionally, the vesting period is between three years and four years for certain performance-based restricted stock that contain a condition whereby the number of shares that ultimately vest are based on the achievement of certain non-market based performance metrics of the Company. Options may not be granted at less than the fair market value of the Company’s common stock at the date of grant.The Company maintains the Directors’ Plan for its Board, which permits the granting of awards in the form of non-qualified stock options, restricted stock or performance shares. The vesting period is determined by the Board at the date of the grant and is generally one year for both options and restricted stock. Under the Directors’ Plan, 1.7 million shares of common stock were reserved for issuance. Any director of the Company who is not an employee of the Company or any of its subsidiaries as of the date that an award is granted is eligible to participate in the Directors’ Plan.Presented below is a summary of the stock-based compensation expense and associated tax benefit in the accompanying consolidated statements of operations:Year Ended December 31,202520242023Stock-based compensation expense$234 $221 $193 Tax benefit$50 $48 $45 The fair value of each employee stock option award is estimated on the date of grant using the Black-Scholes option-pricing model that uses the assumptions noted below. The expected dividend yield is derived from the annual dividend rate on the date of grant. The expected stock volatility is based on an assessment of historical weekly stock prices of the Company as well as implied volatility from Moody’s traded options. The risk-free interest rate is based on U.S.

A summary of nonvested restricted stock activity for the year ended December 31, 2025 is presented below:Nonvested Restricted StockSharesWeighted Average Grant Date Fair Value Per ShareBalance, December 31, 20241.3 $330.84 Granted0.4 $479.70 Vested(0.5)$323.29 Forfeited(0.1)$395.00 Balance, December 31, 20251.1 $400.12 A summary of performance-based restricted stock activity for the year ended December 31, 2025 is presented below:Performance-based restricted stockSharesWeighted Average Grant Date Fair Value Per ShareBalance, December 31, 20240.3 $330.78 Granted0.1 $501.88 Vested(0.1)$313.05 Balance, December 31, 20250.3 $370.

LEASESThe Company has operating leases, substantially all of which relate to the lease of office space. The Company's leases which are classified as finance leases are not material to the consolidated financial statements. Certain of the Company's leases include options to renew, with renewal terms that can extend the lease term from one year to 20 years at the Company's discretion. The following table presents the components of the Company’s lease cost:Year ended December 31,202520242023Operating lease cost$88 $88 $93 Sublease income(7)(7)(7)Variable lease cost21 22 22 Total lease cost$102 $103 $108 During 2025, the Company recorded charges of $4 million related to the non-cash acceleration of amortization of ROU Assets that have been abandoned or for which abandonment is planned in future periods. During 2023, the Company recorded charges of $32 million related to the exit of certain real estate leases that resulted in ROU Asset impairment. These charges were recorded within restructuring expense in the consolidated statements of operations. Refer to Note 9 for further details.The following tables present other information related to the Company’s operating leases:Year ended December 31,202520242023Cash paid for amounts included in the measurement of operating lease liabilities$117 $120 $119 Right-of-use assets obtained in exchange for new operating lease liabilities$143 $21 $40 December 31,202520242023Weighted-average remaining lease term (in years)6.63.84.4Weighted-average discount rate applied to operating leases4.7 %3.2 %3.2 %The following table presents a maturity analysis of the future minimum lease payments included within the Company’s operating lease liabilities at December 31, 2025:Year Ending December 31,Operating Leases2026$100 202787 202831 202936 203030 Thereafter147 Total lease payments (undiscounted)431 Less: Interest74 Present value of lease liabilities:$357 Lease liabilities - current$95 Lease liabilities - noncurrent$262 In the fourth quarter of 2025, the Company entered into an operating lease for a new headquarters in New York City, for which the Company has not yet been granted access to the leased floors. Accordingly, the ROU Assets and operating lease liabilities at December 31, 2025 do not reflect the amounts for this lease. The future minimum lease payments for this lease are approximately $600 million and will commence in 2026 with a lease term of 17 years.

CYBERSECURITY AND RISK MANAGEMENTGovernanceManagementThe Company maintains a dedicated internal cybersecurity team that interacts with executive management and its business units to identify, assess, manage, and respond to cybersecurity risks and incidents relating to the Company’s information systems and operations. In addition, this internal cybersecurity team is responsible for managing detection, mitigation and remediation of cybersecurity incidents. At December 31, 2025, the Company’s internal cybersecurity team consisted of members located in various countries and time zones across the world, managed by the CISO, who reports to the CAO, who is a member of the executive leadership team. The team has members with experience in governance, risk management and compliance, threat monitoring, threat emulation, penetration testing and cyber incident management. Team members have both individual responsibilities and a team focus, covering areas such as network, endpoint device, and e-mail security engineering as well as operations and threat management, monitoring, and response.The TCRC, chaired by the CISO, and whose members include the CTSO, CAO and CRRO, as well as other members of senior management and the legal team, is responsible for identifying cybersecurity risks and threats, recommending mitigating actions to strengthen cybersecurity resilience, and meeting risk tolerance thresholds established by senior management. The TCRC also validates that the Company has appropriate people, process and technology capabilities to identify, mitigate and report on cybersecurity risks to the executive leadership team and the Board of Directors. The TCRC meets regularly to allow members of the internal cybersecurity team to present concerns and recommendations for decisions on preventing, identifying, mitigating, and remediating risks and threats. To the extent warranted, the TCRC may additionally be convened on an ad hoc basis. The TCRC makes decisions regarding the reporting of cybersecurity concerns to the executive leadership team, who escalate issues to the Board and/or the Audit Committee as necessary. In the case of incidents that arise, the TCRC, under the direction of the Board and/or executive leadership team when appropriate, works to involve all appropriate personnel with the aim of resolving the incident, performing any required remediation/reporting, and taking appropriate steps to comply with applicable laws and regulations.