10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark one)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-14037

____________________

Moody’s Corporation

(Exact name of registrant as specified in its charter)

Delaware	13-3998945
(State of Incorporation)	(I.R.S. Employer Identification No.)

7 World Trade Center at 250 Greenwich Street, New York, New York 10007

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code:

(212) 553-0300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	MCO	New York Stock Exchange
1.75% Senior Notes Due 2027	MCO 27	New York Stock Exchange
0.950% Senior Notes Due 2030	MCO 30	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months, or for such shorter period that the registrant was required to submit such files. Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Shares Outstanding at June 30, 2021

186.2 million

1

	MOODY’S CORPORATION INDEX TO FORM 10-Q
		Page(s)
	Glossary of Terms and Abbreviations	3-6
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended June 30, 2021 and 2020	7
	Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Six Months Ended June 30, 2021 and 2020	8
	Consolidated Balance Sheets (Unaudited) at June 30, 2021 and December 31, 2020	9
	Consolidated Statements of Cash Flows (Unaudited) for the Three and Six Months Ended June 30, 2021 and 2020	10
	Consolidated Statements of Shareholders’ Equity (Unaudited) for the Three and Six Months Ended June 30, 2021 and 2020	11-14
	Notes to Condensed Consolidated Financial Statements (Unaudited)	15-46
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
	The Company	47
	Sustainability	47
	Critical Accounting Estimates	48
	Reportable Segments	48
	Results of Operations	49-74
	Liquidity and Capital Resources	74-79
	Recently Issued Accounting Standards	80
	Contingencies	80
	Regulation	80
	Forward-Looking Statements	81-82
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	83
Item 4.	Controls and Procedures	83
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	84
Item 1A.	Risk Factors	84
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	84
Item 5.	Other Information	84
Item 6.	Exhibits	85
SIGNATURES

2

GLOSSARY OF TERMS AND ABBREVIATIONS

The following terms, abbreviations and acronyms are used to identify frequently used terms in this report:

TERM	DEFINITION
Acquire Media (AM)	Business acquired by the Company in October 2020; an aggregator and distributor of curated adverse real-time news, multimedia, data, and alerts
Acquisition-Related Intangible Amortization Expense	Amortization of definite-lived intangible assets acquired by the Company from all business combination transactions
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
Americas	Represents countries within North and South America, excluding the U.S.
AOCI(L)	Accumulated other comprehensive income/loss; a separate component of shareholders’ equity
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, Korea, Malaysia, Singapore, Sri Lanka and Thailand
ASU	The FASB Accounting Standards Update to the ASC. It also 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
Board	The board of directors of the Company
BPS	Basis points
Bureau van Dijk	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
Catylist	A provider of commercial real estate (CRE) solutions for brokers; acquired by the Company on December 30, 2020
CFG	Corporate finance group; an LOB of MIS
CLO	Collateralized loan obligation
CMBS	Commercial mortgage-backed securities; an asset class within SFG
COLI	Corporate-Owned Life Insurance
Common Stock	The Company’s common stock
Company	Moody’s Corporation and its subsidiaries; MCO; Moody’s
Cortera	A provider of North American credit data and workflow solutions; the Company acquired Cortera in March 2021
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 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
CRAs	Credit rating agencies
DBPPs	Defined benefit pension plans
Dodd-Frank Act	Dodd-Frank Wall Street Reform and Consumer Protection Act
EMEA	Represents countries within Europe, the Middle East and Africa
EPS	Earnings per share

3

TERM	DEFINITION
ERS	The Enterprise Risk Solutions LOB within MA, which offers risk management software solutions as well as related risk management advisory engagements services
ESG	Environmental, Social, and Governance
ESMA	European Securities and Markets Authority
ETR	Effective tax rate
EU	European Union
EUR	Euros
EURIBOR	The Euro Interbank Offered Rate
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
External Revenue	Revenue excluding any intersegment amounts
FASB	Financial Accounting Standards Board
FIG	Financial institutions group; an LOB of MIS
Free Cash Flow	Net cash provided by operating activities less cash paid for capital additions
FX	Foreign exchange
GAAP	U.S. Generally Accepted Accounting Principles
GBP	British pounds
ICRA	ICRA Limited; a provider of credit ratings and research in India. ICRA is a public company with its shares listed on the Bombay Stock Exchange and the National Stock Exchange of India. The Company previously held 28.5% equity ownership and in June 2014, increased that ownership stake to over 50% through the acquisition of additional shares
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
LIBOR	London Interbank Offered Rate
LOB	Line of business
MA	Moody’s Analytics - a reportable segment of MCO which provides a wide range of products and services that support financial analysis and risk management activities of institutional participants in global financial markets; consists of two LOBs - RD&A and ERS
MAKS	Moody’s Analytics Knowledge Services; formerly known as Copal Amba; provided offshore research and analytic services to the global financial and corporate sectors; business was divested in the fourth quarter of 2019 and was formerly part of the PS LOB and a reporting unit within the MA reportable segment
MCO	Moody’s Corporation and its subsidiaries; the Company; Moody’s
MD&A	Management’s Discussion and Analysis of Financial Condition and Results of Operations
MIS	Moody’s Investors Service - a reportable segment of MCO; consists of five LOBs - SFG, CFG, FIG, PPIF and MIS Other
MIS Other	Consists of non-ratings revenue from ICRA, KIS Pricing, KIS Research and revenue from providing ESG research, data and assessments. These businesses are components of MIS; MIS Other is an LOB of MIS
Moody’s	Moody’s Corporation and its subsidiaries; MCO; the Company
MSS	Moody's Shared Services; primarily consists of information technology and support staff such as finance, human resources and legal that support both MIS and MA.
Net Income	Net income attributable to Moody’s Corporation, which excludes net income from consolidated noncontrolling interests belonging to the minority interest holder

4

TERM	DEFINITION
New Credit Losses Accounting Standard	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 use of an “expected credit loss” impairment model for most financial assets reported at amortized cost, which will require entities to estimate expected credit losses over the lifetime of the instrument.
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.
OCI	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
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 Plan	The U.S. retirement healthcare and U.S. retirement life insurance plans
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
RD&A	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; learning solutions
Recurring 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
Reform Act	Credit Rating Agency Reform Act of 2006
Regulatory DataCorp Inc. (RDC)	A global leader in risk and compliance intelligence; the Company acquired RDC in February 2020
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
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 accounting guidance significantly changes 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
RMBS	Residential mortgage-backed securities; an asset class within SFG
SEC	U.S. Securities and Exchange Commission
Securities Act	Securities Act of 1933, as amended
SFG	Structured finance group; an LOB of MIS
SG&A	Selling, general and administrative expenses
Tax Act	The “Tax Cuts and Jobs Act” enacted into U.S. law on December 22, 2017 which significantly amends the tax code in the U.S.

5

TERM	DEFINITION
Transaction Revenue	For MIS, 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.S.	United States
USD	U.S. dollar
UTPs	Uncertain tax positions
YTD	Year-To-Date
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
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
2012 Senior Notes due 2022	Principal amount of $500 million, 4.50% senior unsecured notes due in September 2022
2013 Senior Notes due 2024	Principal amount of the $500 million, 4.875% senior unsecured notes due in February 2024
2014 Senior Notes due 2044	Principal amount of $600 million, 5.25% senior unsecured notes due in July 2044
2015 Senior Notes due 2027	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, 3.250% senior unsecured notes due January 15, 2028
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 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 due 2030	Principal amount of €750 million, 0.950% senior unsecured notes due 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

6

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Amounts in millions, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue	$	1,553	$	1,435	$	3,153	$	2,725
Expenses
Operating	365		362		758		702
Selling, general and administrative	327		307		620		608
Depreciation and amortization	60		58		119		107
Restructuring	—		(2)		2		(3)
Loss pursuant to the divestiture of MAKS	—		—		—		9
Total expenses	752		725		1,499		1,423
Operating income	801		710		1,654		1,302
Non-operating (expense) income, net
Interest expense, net	(49)		(60)		(56)		(100)
Other non-operating income, net	6		16		22		28
Total non-operating (expense) income, net	(43)		(44)		(34)		(72)
Income before provision for income taxes	758		666		1,620		1,230
Provision for income taxes	181		157		307		234
Net income	577		509		1,313		996
Less: Net income (loss) attributable to noncontrolling interests	—		—		—		(1)
Net income attributable to Moody's	$	577	$	509	$	1,313	$	997
Earnings per share attributable to Moody's common shareholders
Basic	$	3.09	$	2.71	$	7.02	$	5.31
Diluted	$	3.07	$	2.69	$	6.98	$	5.27
Weighted average number of shares outstanding
Basic	186.7		187.7		187.0		187.6
Diluted	187.9		189.0		188.2		189.3

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

7

MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(Amounts in millions)

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
	Pre-tax amounts		Tax amounts		After-tax amounts		Pre-tax amounts		Tax amounts		After-tax amounts
Net Income					$	577					$	509
Other Comprehensive Income (Loss):
Foreign Currency Adjustments:
Foreign currency translation adjustments, net	$	37	$	(2)	35		$	78	$	1	79
Net losses on net investment hedges	(41)		12		(29)		(97)		24		(73)
Net investment hedges - reclassification of gains included in net income	(1)		1		—		—		—		—
Cash Flow Hedges:
Net losses on cash flow hedges	—		—		—		(20)		6		(14)
Pension and Other Retirement Benefits:
Amortization of actuarial losses/prior service costs and settlement charge included in net income	10		(2)		8		1		—		1
Net actuarial gains (losses) and prior service costs	—		—		—		9		(2)		7
Total other comprehensive income (loss)	$	5	$	9	14		$	(29)	$	29	—
Comprehensive income					591						509
Less: comprehensive (loss) income attributable to noncontrolling interests					(1)						(11)
Comprehensive Income Attributable to Moody's					$	592					$	520

	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
	Pre-tax amounts		Tax amounts		After-tax amounts		Pre-tax amounts		Tax amounts		After-tax amounts
Net Income					$	1,313					$	996
Other Comprehensive Income (Loss):
Foreign Currency Adjustments:
Foreign currency translation adjustments, net	$	(110)	$	4	(106)		$	(97)	$	6	(91)
Net gains on net investment hedges	134		(30)		104		22		(6)		16
Net investment hedges - reclassification of gains included in net income	(2)		1		(1)		—		—		—
Cash Flow Hedges:
Net losses on cash flow hedges	—		—		—		(68)		18		(50)
Reclassification of losses included in net income	1		—		1		1		—		1
Pension and Other Retirement Benefits:
Amortization of actuarial losses/prior service costs and settlement charge included in net income	13		(3)		10		3		(1)		2
Net actuarial gains (losses) and prior service costs	—		—		—		8		(2)		6
Total other comprehensive income (loss)	$	36	$	(28)	8		$	(131)	$	15	(116)
Comprehensive income					1,321						880
Less: comprehensive income (loss) attributable to noncontrolling interests					1						(13)
Comprehensive Income Attributable to Moody's					$	1,320					$	893

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

8

MOODY’S CORPORATION

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Amounts in millions, except per share data)

	June 30, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	2,809	$	2,597
Short-term investments	88		99
Accounts receivable, net of allowance for credit losses of $32 in 2021 and $34 in 2020	1,458		1,430
Other current assets	379		383
Total current assets	4,734		4,509
Property and equipment, net of accumulated depreciation of $969 in 2021 and $928 in 2020	282		278
Operating lease right-of-use assets	357		393
Goodwill	4,590		4,556
Intangible assets, net	1,784		1,824
Deferred tax assets, net	249		334
Other assets	556		515
Total assets	$	12,552	$	12,409
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	816	$	1,039
Current portion of operating lease liabilities	92		94
Deferred revenue	1,142		1,089
Total current liabilities	2,050		2,222
Non-current portion of deferred revenue	93		98
Long-term debt	6,355		6,422
Deferred tax liabilities, net	422		404
Uncertain tax positions	406		483
Operating lease liabilities	386		427
Other liabilities	460		590
Total liabilities	10,172		10,646
Contingencies (Note 18)
Shareholders' equity:
Preferred stock, par value $0.01 per share; 10,000,000 shares authorized; no shares issued and outstanding	—		—
Series common stock, par value $0.01 per share; 10,000,000 shares authorized; no shares issued and outstanding	—		—
Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 342,902,272 shares issued at June 30, 2021 and December 31, 2020, respectively.	3		3
Capital surplus	784		735
Retained earnings	12,094		11,011
Treasury stock, at cost; 156,723,618 and 155,808,563 shares of common stock at June 30, 2021 and December 31, 2020	(10,270)		(9,748)
Accumulated other comprehensive loss	(425)		(432)
Total Moody's shareholders' equity	2,186		1,569
Noncontrolling interests	194		194
Total shareholders' equity	2,380		1,763
Total liabilities, noncontrolling interests and shareholders' equity	$	12,552	$	12,409

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

9

MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Amounts in millions)

	Six Months Ended June 30,
	2021		2020
Cash flows from operating activities
Net income	$	1,313	$	996
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	119		107
Stock-based compensation	86		72
Deferred income taxes	59		46
Loss pursuant to the divestiture of MAKS	—		9
Settlement of treasury rate lock	—		(68)
Changes in assets and liabilities:
Accounts receivable	(29)		11
Other current assets	17		(45)
Other assets	(23)		(39)
Accounts payable and accrued liabilities	(182)		31
Deferred revenue	49		(60)
Unrecognized tax benefits and other non-current tax liabilities	(75)		(13)
Other liabilities	(64)		(70)
Net cash provided by operating activities	1,270		977
Cash flows from investing activities
Capital additions	(44)		(62)
Purchases of investments	(109)		(108)
Sales and maturities of investments	85		45
Cash paid for acquisitions, net of cash acquired	(138)		(698)
Receipts from settlements of net investment hedges	2		—
Payments for settlements of net investment hedges	(47)		—
Net cash used in investing activities	(251)		(823)
Cash flows from financing activities
Issuance of notes	—		995
Repayment of notes	—		(300)
Issuance of commercial paper	—		789
Repayment of commercial paper	—		(792)
Proceeds from stock-based compensation plans	23		29
Repurchase of shares related to stock-based compensation	(79)		(100)
Treasury shares	(503)		(253)
Dividends	(232)		(210)
Debt issuance costs, extinguishment costs and related fees	—		(17)
Dividends to noncontrolling interest	(1)		(1)
Payment to acquire noncontrolling interests	—		(17)
Net cash (used in) provided by financing activities	(792)		123
Effect of exchange rate changes on cash and cash equivalents	(15)		(10)
Increase in cash and cash equivalents	212		267
Cash and cash equivalents, beginning of period	2,597		1,832
Cash and cash equivalents, end of period	$	2,809	$	2,099

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

10

MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

(Amounts in millions, except per share data)

Shareholders of Moody's Corporation
	Common Stock			Capital Surplus		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Loss		Total Moody's Shareholders' Equity		Non- Controlling Interests		Total Shareholders' Equity
	Shares	Amount						Shares	Amount
Balance at March 31, 2020	342.9	$	3	$	616	$	10,041	(155.4)	$	(9,524)	$	(554)	$	582	$	217	$	799
Net income						509							509		1		510
Dividends ($0.56 per share)						(108)							(108)		—		(108)
Stock-based compensation				35									35				35
Shares issued for stock-based compensation plans at average cost, net				2				0.2	11				13				13
Purchase of noncontrolling interest				(2)									(2)		(15)		(17)
Currency translation adjustment, net of net investment hedge activity (net of tax of $25 million)											18		18		(12)		6
Net actuarial gains and prior service cost (net of tax of $2 million)											7		7				7
Amortization of prior service costs and actuarial losses											1		1				1
Net realized and unrealized loss on cash flow hedges (net of tax of $6 million)											(14)		(14)				(14)
Balance at June 30, 2020	342.9	$	3	$	651	$	10,442	(155.2)	$	(9,513)	$	(542)	$	1,041	$	191	$	1,232

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

11

MOODY'S CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

(Amounts in millions, except per share data)

Shareholders of Moody's Corporation
	Common Stock			Capital Surplus		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Loss		Total Moody's Shareholders' Equity		Non- Controlling Interests		Total Shareholders' Equity
	Shares	Amount						Shares	Amount
Balance at December 31, 2019	342.9	$	3	$	642	$	9,656	(155.2)	$	(9,250)	$	(439)	$	612	$	219	$	831
Net income						997							997		—		997
Dividends ($1.12 per share)						(209)							(209)		—		(209)
Adoption of New Credit Losses Accounting Standard						(2)							(2)				(2)
Stock-based compensation				72									72				72
Shares issued for stock-based compensation plans at average cost, net				(61)				1.1	(10)				(71)				(71)
Purchase of noncontrolling interest				(2)									(2)		(15)		(17)
Treasury shares repurchased				—				(1.1)	(253)				(253)				(253)
Currency translation adjustment, net of net investment hedge activity											(62)		(62)		(13)		(75)
Net actuarial gains and prior service costs (net of tax of $2 million)											6		6				6
Amortization of prior service costs and actuarial losses (net of tax of $1 million)											2		2				2
Net realized and unrealized loss on cash flow hedges (net of tax of $18 million)											(49)		(49)				(49)
Balance at June 30, 2020	342.9	$	3	$	651	$	10,442	(155.2)	$	(9,513)	$	(542)	$	1,041	$	191	$	1,232

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

12

MOODY'S CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

(Amounts in millions, except per share data)

Shareholders of Moody's Corporation
	Common Stock			Capital Surplus		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Loss		Total Moody's Shareholders' Equity		Non- Controlling Interests		Total Shareholders' Equity
	Shares	Amount						Shares	Amount
Balance at March 31, 2021	342.9	$	3	$	739	$	11,632	(155.7)	$	(9,904)	$	(440)	$	2,030	$	195	$	2,225
Net income						577							577		—		577
Dividends ($0.62 per share)						(115)							(115)		—		(115)
Stock-based compensation				41									41				41
Shares issued for stock-based compensation plans at average cost, net				4				0.1	5				9				9
Treasury shares repurchased								(1.1)	(371)				(371)				(371)
Currency translation adjustment, net of net investment hedge activity (net of tax of $11 million)											7		7		(1)		6
Amortization of prior service costs/actuarial losses and settlement charge (net of tax of $2 million)											8		8				8
Balance at June 30, 2021	342.9	$	3	$	784	$	12,094	(156.7)	$	(10,270)	$	(425)	$	2,186	$	194	$	2,380

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

13

MOODY'S CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY UNAUDITED)

(Amounts in millions, except per share data)

Shareholders of Moody's Corporation
	Common Stock			Capital Surplus		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Loss		Total Moody's Shareholders' Equity		Non- Controlling Interests		Total Shareholders' Equity
	Shares	Amount						Shares	Amount
Balance at December 31, 2020	342.9	$	3	$	735	$	11,011	(155.8)	$	(9,748)	$	(432)	$	1,569	$	194	$	1,763
Net income						1,313							1,313		—		1,313
Dividends ($1.24 per share)						(230)							(230)		(1)		(231)
Stock-based compensation				86									86				86
Shares issued for stock-based compensation plans at average cost, net				(37)				0.7	(19)				(56)				(56)
Treasury shares repurchased								(1.6)	(503)				(503)				(503)
Currency translation adjustment, net of net investment hedge activity (net of tax of $25 million)											(4)		(4)		1		(3)
Amortization of prior service costs/actuarial losses and settlement charge (net of tax of $3 million)											10		10				10
Net realized and unrealized gain on cash flow hedges											1		1				1
Balance at June 30, 2021	342.9	$	3	$	784	$	12,094	(156.7)	$	(10,270)	$	(425)	$	2,186	$	194	$	2,380

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

14

MOODY’S CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(tabular dollar and share amounts in millions, except per share data)

NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Moody’s is a global integrated risk assessment firm that empowers organizations and investors to make better decisions. Moody’s reports in two reportable segments: MIS and MA.

MIS publishes credit ratings and provides assessment services on a wide range of debt obligations and the entities that issue such obligations in markets worldwide. Revenue is primarily derived from the originators and issuers of such transactions who use MIS ratings in 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.

MA is a global provider of data and analytic solutions which help companies make better and faster decisions. MA’s analytic models, industry insights, software tools and proprietary data assets allow companies to inform and perform many critical business activities with trust and confidence. MA’s approach to aggregating, broadening and deepening available data, research, analytic tools and software solutions fosters a more integrated and efficient delivery to MA's customers resulting in better decisions around risks and opportunities.

These interim financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the Company’s consolidated financial statements and related notes in the Company’s 2020 annual report on Form 10-K filed with the SEC on February 22, 2021. The results of interim periods are not necessarily indicative of results for the full year or any subsequent period. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented have been included. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

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

Adoption of New Accounting Standards

On January 1, 2021, the Company adopted ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 Financial Instruments.” This ASU clarifies and improves guidance related to the recently issued standards updates on credit losses, hedging, and recognition and measurement of financial instruments. The Company adopted this ASU prospectively and it did not have a material impact on the Company's current financial statements.

On January 1, 2021, the Company adopted ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This ASU simplifies the accounting for income taxes by eliminating certain exceptions to the general principles in Topic 740, Income Taxes, and clarifies certain aspects of the existing guidance to promote consistency among reporting entities. Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company adopted this ASU prospectively and it did not have a material impact on the Company's current financial statements.

Recently Issued Accounting Standards

In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform - Scope,” which clarified the scope and application of the original guidance, ASU No. 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting" ("ASU No. 2020-04"), issued in March 2020. ASU No. 2020-04 provides temporary optional expedients 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.

COVID-19

The COVID-19 pandemic has not had a material adverse impact on the Company's reported results to date and is currently not expected to have a material adverse impact on its near-term outlook. However, Moody's is unable to predict the longer-term impact that the pandemic may have on its business, future results of operations, financial position or cash flows due to numerous uncertainties.

15

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Pursuant to a strategic reorganization in the MA operating segment which was completed in the second quarter of 2021, the Company realigned its MA reporting units used in assessing goodwill for impairment as of June 30, 2021. Accordingly, the Company revised its accounting policy for goodwill to reflect the change in MA's reporting units, which is discussed below. All other significant accounting policies described in the Form 10-K for the year ended December 31, 2020 remain unchanged. This reorganization did not result in a change to the Company's reportable segments.

Goodwill

Moody’s evaluates its goodwill for impairment at the reporting unit level, defined as an operating segment (i.e., MIS and MA), 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.

Prior to the second quarter of 2021, MA's reporting unit structure consisted of five reporting units (Content, ERS, MALS, Bureau van Dijk and Reis). Pursuant to a strategic reorganization in the MA segment which was completed in the second quarter of 2021, MA's reporting unit structure has been reorganized into two reporting units. MA’s two new reporting units generally consist of: i) businesses offering data and data-driven analytical solutions; and ii) risk-management software, workflow and CRE solutions.

The Company performed qualitative assessments of the reporting units impacted by the reorganization immediately before and after the reorganization became effective. These qualitative assessments resulted in the Company determining that it was not more likely than not that the fair value of any reporting unit was less than its carrying amount.

The Company will perform a quantitative assessment on the new reporting units as of July 31, 2021, the date of the Company’s annual goodwill impairment assessment, which will provide new baseline valuations under the new reporting unit structure.

16

NOTE 3. REVENUES

Revenue by Category

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
MIS:
Corporate finance (CFG)
Investment-grade	$	102	$	291	$	236	$	435
High-yield	124		99		265		174
Bank loans	157		43		337		132
Other accounts (1)	167		139		317		284
Total CFG	550		572		1,155		1,025
Financial institutions (FIG)
Banking	101		88		210		174
Insurance	33		44		76		74
Managed investments	13		8		21		14
Other accounts	3		2		5		5
Total FIG	150		142		312		267
Public, project and infrastructure finance (PPIF)
Public finance / sovereign	63		64		130		121
Project and infrastructure	67		69		143		121
Total PPIF	130		133		273		242
Structured finance (SFG)
Asset-backed securities	33		23		59		45
RMBS	31		23		58		50
CMBS	23		13		47		30
Structured credit	53		21		91		50
Other accounts	—		1		1		2
Total SFG	140		81		256		177
Total ratings revenue	970		928		1,996		1,711
MIS Other	10		10		20		21
Total external revenue	980		938		2,016		1,732
Intersegment revenue	42		35		82		72
Total MIS	1,022		973		2,098		1,804
MA:
Research, data and analytics (RD&A)	435		366		854		724
Enterprise risk solutions (ERS)	138		131		283		269
Total external revenue	573		497		1,137		993
Intersegment revenue	2		2		4		4
Total MA	575		499		1,141		997
Eliminations	(44)		(37)		(86)		(76)
Total MCO	$	1,553	$	1,435	$	3,153	$	2,725

(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.

17

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

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
	U.S.		Non-U.S		Total		U.S.		Non-U.S		Total
MIS:
Corporate finance	$	345	$	205	$	550	$	413	$	159	$	572
Financial institutions	69		81		150		70		72		142
Public, project and infrastructure finance	79		51		130		87		46		133
Structured finance	88		52		140		45		36		81
Total ratings revenue	581		389		970		615		313		928
MIS Other	1		9		10		1		9		10
Total MIS	582		398		980		616		322		938
MA:
Research, data and analytics	190		245		435		167		199		366
Enterprise risk solutions	59		79		138		54		77		131
Total MA	249		324		573		221		276		497
Total MCO	$	831	$	722	$	1,553	$	837	$	598	$	1,435

	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
	U.S.		Non-U.S		Total		U.S.		Non-U.S		Total
MIS:
Corporate finance	$	759	$	396	$	1,155	$	727	$	298	$	1,025
Financial institutions	155		157		312		130		137		267
Public, project and infrastructure finance	157		116		273		155		87		242
Structured finance	156		100		256		106		71		177
Total ratings revenue	1,227		769		1,996		1,118		593		1,711
MIS Other	2		18		20		1		20		21
Total MIS	1,229		787		2,016		1,119		613		1,732
MA:
Research, data and analytics	373		481		854		325		399		724
Enterprise risk solutions	114		169		283		107		162		269
Total MA	487		650		1,137		432		561		993
Total MCO	$	1,716	$	1,437	$	3,153	$	1,551	$	1,174	$	2,725

18

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
MIS:
U.S.	$	582	$	616	$	1,229	$	1,119
Non-U.S.:
EMEA	248		183		496		354
Asia-Pacific	100		90		197		171
Americas	50		49		94		88
Total Non-U.S.	398		322		787		613
Total MIS	980		938		2,016		1,732
MA:
U.S.	249		221		487		432
Non-U.S.:
EMEA	233		190		463		382
Asia-Pacific	55		54		114		109
Americas	36		32		73		70
Total Non-U.S.	324		276		650		561
Total MA	573		497		1,137		993
Total MCO	$	1,553	$	1,435	$	3,153	$	2,725

19

The following tables summarize the split between transaction and recurring revenue. In the MIS segment, excluding MIS Other, transaction revenue represents the initial rating of a new debt issuance as well as other one-time fees while recurring revenue represents the 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. In MIS Other, transaction revenue represents revenue from professional services and recurring revenue represents subscription-based revenues. In the MA segment, recurring revenue represents subscription-based revenues and software maintenance revenue. Transaction revenue in MA represents perpetual software license fees and revenue from software implementation services, risk management advisory projects, and training and certification services.

	Three Months Ended June 30,
	2021										2020
	Transaction				Recurring			Total			Transaction			Recurring			Total
Corporate Finance	$	427			$	123		$	550		$	457		$	115		$	572
	78		%		22		%	100		%	80		%	20		%	100		%
Financial Institutions	$	79			$	71		$	150		$	76		$	66		$	142
	53		%		47		%	100		%	54		%	46		%	100		%
Public, Project and Infrastructure Finance	$	88			$	42		$	130		$	96		$	37		$	133
	68		%		32		%	100		%	72		%	28		%	100		%
Structured Finance	$	92			$	48		$	140		$	35		$	46		$	81
	66		%		34		%	100		%	43		%	57		%	100		%
MIS Other	$	—			$	10		$	10		$	—		$	10		$	10
	—		%		100		%	100		%	—		%	100		%	100		%
Total MIS	$	686			$	294		$	980		$	664		$	274		$	938
	70		%		30		%	100		%	71		%	29		%	100		%
Research, data and analytics	$	22			$	413		$	435		$	16		$	350		$	366
	5		%		95		%	100		%	4		%	96		%	100		%
Enterprise risk solutions	$	16			$	122		$	138		$	26		$	105		$	131
	12		%		88		%	100		%	20		%	80		%	100		%
Total MA	$	38		(1)	$	535		$	573		$	42		$	455		$	497
	7		%		93		%	100		%	8		%	92		%	100		%
Total Moody's Corporation	$	724			$	829		$	1,553		$	706		$	729		$	1,435
	47		%		53		%	100		%	49		%	51		%	100		%

	Six Months Ended June 30,
	2021										2020
	Transaction				Recurring			Total			Transaction			Recurring			Total
Corporate Finance	$	914			$	241		$	1,155		$	795		$	230		$	1,025
	79		%		21		%	100		%	78		%	22		%	100		%
Financial Institutions	$	169			$	143		$	312		$	136		$	131		$	267
	54		%		46		%	100		%	51		%	49		%	100		%
Public, Project and Infrastructure Finance	$	188			$	85		$	273		$	165		$	77		$	242
	69		%		31		%	100		%	68		%	32		%	100		%
Structured Finance	$	158			$	98		$	256		$	85		$	92		$	177
	62		%		38		%	100		%	48		%	52		%	100		%
MIS Other	$	2			$	18		$	20		$	2		$	19		$	21
	10		%		90		%	100		%	10		%	90		%	100		%
Total MIS	$	1,431			$	585		$	2,016		$	1,183		$	549		$	1,732
	71		%		29		%	100		%	68		%	32		%	100		%
Research, data and analytics	$	42			$	812		$	854		$	34		$	690		$	724
	5		%		95		%	100		%	5		%	95		%	100		%
Enterprise risk solutions	$	39			$	244		$	283		$	58		$	211		$	269
	14		%		86		%	100		%	22		%	78		%	100		%
Total MA	$	81		(1)	$	1,056		$	1,137		$	92		$	901		$	993
	7		%		93		%	100		%	9		%	91		%	100		%
Total Moody's Corporation	$	1,512			$	1,641		$	3,153		$	1,275		$	1,450		$	2,725
	48		%		52		%	100		%	47		%	53		%	100		%

(1) Revenue from software implementation services and risk management advisory projects, while classified by management as transactional revenue, is recognized over time under the Revenue Accounting Standard (please also refer to the following table).

20

The following table presents the timing of revenue recognition:

	Three Months Ended June 30, 2021						Six Months Ended June 30, 2021
	MIS		MA		Total		MIS		MA		Total
Revenue recognized at a point in time	$	686	$	20	$	706	$	1,431	$	49	$	1,480
Revenue recognized over time	294		553		847		585		1,088		1,673
Total	$	980	$	573	$	1,553	$	2,016	$	1,137	$	3,153

	Three Months Ended June 30, 2020						Six Months Ended June 30, 2020
	MIS		MA		Total		MIS		MA		Total
Revenue recognized at a point in time	$	664	$	20	$	684	$	1,183	$	59	$	1,242
Revenue recognized over time	274		477		751		549		934		1,483
Total	$	938	$	497	$	1,435	$	1,732	$	993	$	2,725

Unbilled receivables, deferred revenue and remaining performance obligations

Unbilled receivables

At June 30, 2021 and December 31, 2020, accounts receivable, net included $429 million and $361 million, respectively, of unbilled receivables, net related to the MIS segment. Certain MIS arrangements contain contractual terms whereby the customers are billed in arrears for annual monitoring services, requiring revenue to be accrued as an unbilled receivable as such services are provided.

In addition, for certain MA arrangements, the timing of when the Company has the unconditional right to consideration and recognizes revenue occurs prior to invoicing the customer. Consequently, at June 30, 2021 and December 31, 2020, accounts receivable, net included $95 million and $98 million, respectively, of unbilled receivables, net related to the MA segment.

Deferred revenue

The Company recognizes deferred revenue when a contract requires a customer to pay consideration to the Company in advance of when revenue related to that contract is recognized. This deferred revenue is relieved when the Company satisfies the related performance obligation and revenue is recognized.

Significant changes in the deferred revenue balances during the three and six months ended June 30, 2021 and 2020 are as follows:

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
	MIS		MA		Total		MIS		MA		Total
Balance at March 31,	$	388	$	940	$	1,328	$	379	$	843	$	1,222
Changes in deferred revenue
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(119)		(338)		(457)		(115)		(341)		(456)
Increases due to amounts billable excluding amounts recognized as revenue during the period	98		262		360		100		234		334
Effect of exchange rate changes	1		3		4		1		4		5
Total changes in deferred revenue	(20)		(73)		(93)		(14)		(103)		(117)
Balance at June 30,	$	368	$	867	$	1,235	$	365	$	740	$	1,105

21

	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
	MIS		MA		Total		MIS		MA			Total
Balance at December 31,	$	313	$	874	$	1,187	$	322	$	840		$	1,162
Changes in deferred revenue
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(162)		(565)		(727)		(167)		(578)		(1)	(745)
Increases due to amounts billable excluding amounts recognized as revenue during the period	219		555		774		213		478		(1)	691
Increases due to acquisitions during the period	—		4		4		—		20			20
Effect of exchange rate changes	(2)		(1)		(3)		(3)		(20)			(23)
Total changes in deferred revenue	55		(7)		48		43		(100)			(57)
Balance at June 30,	$	368	$	867	$	1,235	$	365	$	740		$	1,105
Deferred revenue - current	$	279	$	863	$	1,142	$	265	$	736		1,001
Deferred revenue - noncurrent	$	89	$	4	$	93	$	100	$	4		104

(1) The 2020 amounts were both reduced by $99 million from amounts previously disclosed in the Form 10-Q for the six months ended June 30, 2020.

For the MIS segment, the changes in the deferred revenue balance during the three and six months ended June 30, 2021 were primarily related to the significant portion of contract renewals that occurred during the first quarter of 2021 and are generally recognized over a one year period.

For the MA segment, the decrease in deferred revenue for the three months ended June 30, 2021 was primarily due to the recognition of annual subscription and maintenance billings from December 2020 and January 2021. For the six months ended June 30, 2021, the decrease in the deferred revenue balance is attributable to recognition of revenues related to the aforementioned December 2020 billings being partially offset by the impact of the high concentration of January 2021 billings.

Remaining performance obligations

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 June 30, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $118 million. The Company expects to recognize into revenue approximately 20% 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 from the amounts stated above relating to unsatisfied performance obligations for contracts with an original expected length of one year or less.

Remaining performance obligations in the MA segment include both amounts recorded as deferred revenue on the balance sheet as of June 30, 2021 as well as amounts not yet invoiced to customers as of June 30, 2021, largely reflecting future revenue related to signed multi-year arrangements for hosted and installed subscription-based products. As of June 30, 2021, 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.

22

NOTE 4. STOCK-BASED COMPENSATION

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Stock-based compensation cost	$	41	$	35	$	86	$	72
Tax benefit	$	10	$	7	$	21	$	14

During the first six months of 2021, the Company granted 0.1 million employee stock options, which had a weighted average grant date fair value of $67.41 per share based on the Black-Scholes option-pricing model. The Company also granted 0.5 million shares of restricted stock in the first six months of 2021, which had a weighted average grant date fair value of $277.22 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 are 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 $268.85 per share.

The following weighted average assumptions were used in determining the fair value for options granted in 2021:

Expected dividend yield	0.89	%
Expected stock volatility	28	%
Risk-free interest rate	0.81 %
Expected holding period	5.6 years

Unrecognized stock-based compensation expense at June 30, 2021 was $11 million and $230 million for stock options and unvested restricted stock, respectively, which is expected to be recognized over a weighted average period of 2.5 years and 2.6 years, respectively. Additionally, there was $39 million of unrecognized stock-based compensation expense relating to the aforementioned non-market-based performance-based awards, which is expected to be recognized over a weighted average period of 2.1 years.

The following tables summarize information relating to stock option exercises and restricted stock vesting:

	Six Months Ended June 30,
	2021		2020
Exercise of stock options:
Proceeds from stock option exercises	$	16	$	23
Aggregate intrinsic value	$	35	$	74
Tax benefit realized upon exercise	$	8	$	18
Number of shares exercised	0.2		0.4
Vesting of restricted stock:
Fair value of shares vested	$	187	$	193
Tax benefit realized upon vesting	$	43	$	45
Number of shares vested	0.7		0.8
Vesting of performance-based restricted stock:
Fair value of shares vested	$	28	$	70
Tax benefit realized upon vesting	$	7	$	17
Number of shares vested	0.1		0.3

23

NOTE 5. INCOME TAXES

Moody’s effective tax rate was 23.9% and 23.6% for the three months ended June 30, 2021 and 2020, respectively and 19.0% for both six months ended June 30, 2021 and 2020 periods. The Company’s year to date tax expense differs from the tax computed by applying its estimated annual effective tax rate to the year-to-date pre-tax earnings primarily due to Excess Tax Benefits from stock compensation of $26 million and net reductions in UTPs of $61 million related to a settlement and a lapse of a statute of limitations.

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 (expense) income, net. The Company had an increase in its UTPs of $4 million ($4 million net of federal tax) during the second quarter of 2021 and a decrease in its UTPs of $76 million ($67 million, net of federal tax) during the first six months of 2021, which primarily related to the aforementioned resolution of uncertain tax positions. The Company also reversed $40 million in accrued interest in connection with these matters in the first quarter of 2021.

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 for 2019 remains open to examination and 2017 and 2018 are currently under examination. The Company’s New York City tax return for 2014 through 2017 are currently under examination. The Company’s U.K. tax return for 2012 is currently under examination and its returns for 2013 through 2019 remain open to examination.

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

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

	Six Months Ended June 30,
	2021		2020
Income taxes paid	$	327	$	111

NOTE 6. WEIGHTED AVERAGE SHARES OUTSTANDING

Below is a reconciliation of basic to diluted shares outstanding:

	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
Basic	186.7	187.7	187.0	187.6
Dilutive effect of shares issuable under stock-based compensation plans	1.2	1.3	1.2	1.7
Diluted	187.9	189.0	188.2	189.3
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above	0.2	0.3	0.3	0.3

The calculation of diluted EPS requires certain assumptions regarding the use of both cash proceeds and assumed proceeds that would be received upon the exercise of stock options and vesting of restricted stock outstanding as of June 30, 2021 and 2020.

24

NOTE 7. CASH EQUIVALENTS AND INVESTMENTS

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

	As of June 30, 2021
							Balance sheet location
	Cost		Gains/(Losses)		Fair Value		Cash and cash equivalents		Short-term investments		Other assets
Certificates of deposit and money market deposit accounts (1)	$	1,481	$	—	$	1,481	$	1,370	$	88	$	23
Mutual funds	$	53	$	7	$	60	$	—	$	—	$	60

	As of December 31, 2020
							Balance sheet location
	Cost		Gains/(Losses)		Fair Value		Cash and cash equivalents		Short-term investments		Other assets
Certificates of deposit and money market deposit accounts (1)	$	1,430	$	—	$	1,430	$	1,325	$	99	$	6
Mutual funds	$	54	$	6	$	60	$	—	$	—	$	60

(1) Consists of time deposits and money market deposit accounts. The remaining contractual maturities for the certificates of deposits classified as short-term investments were one month to 12 months at both June 30, 2021 and December 31, 2020. The remaining contractual maturities for the certificates of deposits classified in other assets are 13 months to 23 months at both June 30, 2021 and December 31, 2020. Time deposits with a maturity of less than 90 days at time of purchase are classified as cash and cash equivalents.

In addition, the Company invested in Corporate-Owned Life Insurance (COLI) in the first quarter of 2020. As of June 30, 2021 and December 31, 2020, the contract value of the COLI was $36 million and $17 million, respectively.

NOTE 8. ACQUISITIONS

The business combinations described below are 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.

Cortera

On March 19, 2021, the Company acquired 100% of Cortera, a provider of North American credit data and workflow solutions.

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

Cash paid at closing	$	138
Additional consideration paid to sellers in 2021 (1)	1
Total consideration	$	139

(1) Represents additional consideration paid to the sellers following finalization of customary post-closing completion adjustments.

25

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

Current assets			$	7
Intangible assets:
Database (10 year useful life)	$	38
Customer relationships (18 year useful life)	9
Product technology (8 year useful life)	9
Trade name (5 year useful life)	1
Total intangible assets (11 year weighted average useful life)			57
Goodwill			95
Other assets			2
Liabilities:
Accounts payable and accrued liabilities	$	(1)
Deferred revenue	(4)
Deferred tax liabilities	(15)
Other liabilities	(2)
Total liabilities			(22)
Net assets acquired			$	139

The Company has performed a preliminary valuation analysis of the fair market value of assets and liabilities of the Cortera business. The final purchase price allocation will be determined when the Company has completed and fully reviewed the detailed valuations. The final allocation could differ materially from the preliminary allocation. The final allocation may include changes in allocations to acquired intangible assets as well as goodwill and other changes to assets and liabilities including reserves for UTPs and deferred tax liabilities. The estimated useful lives of acquired intangibles assets are also preliminary.

Current assets in the table above include acquired cash of $4 million and accounts receivable of approximately $2 million.

Goodwill

The goodwill recognized as a result of this acquisition includes, among other things, the value of combining the complementary risk assessment products of the Company and Cortera, which is expected to extend the Company’s reach to new and evolving market segments as well as cost savings synergies, expected new customer acquisitions and products.

Goodwill, which has been assigned to the MA segment, is not deductible for tax purposes.

Transaction costs

Transaction costs directly related to the Cortera acquisition were not material.

RDC

On February 13, 2020, the Company acquired 100% of RDC, a provider of anti-money laundering and know-your-customer data and due diligence services.

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

Cash paid at closing	$	700
Additional consideration paid to sellers in 2020 (1)	2
Total consideration	$	702

(1) Represents additional consideration paid to the sellers following finalization of customary post-closing completion adjustments.

26

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

Current assets			$	24
Intangible assets:
Customer relationships (25 year useful life)	$	174
Database (10 year useful life)	86
Product technology (4 year useful life)	17
Trade name (3 year useful life)	3
Total intangible assets (19 year weighted average life)			280
Goodwill			494
Other assets			2
Liabilities:
Accounts payable and accrued liabilities	$	(5)
Deferred revenue	(20)
Deferred tax liabilities	(71)
Other liabilities	(2)
Total liabilities			(98)
Net assets acquired			$	702

Current assets in the table above include acquired cash of $6 million and accounts receivable of approximately $14 million.

Goodwill

The goodwill recognized as a result of this acquisition includes, among other things, the value of combining the complementary product portfolios of the Company and RDC, which is expected to extend the Company’s reach to new and evolving market segments as well as cost savings synergies, expected new customer acquisitions and products.

Goodwill, which has been assigned to the MA segment, is not deductible for tax purposes.

Transaction costs

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

NOTE 9. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company is exposed to global market risks, including risks from changes in FX rates and changes in interest rates. Accordingly, the Company uses derivatives in certain instances to manage the aforementioned financial exposures that occur in the normal course of business. The Company does not hold or issue derivatives for speculative purposes.

Derivatives and non-derivative instruments designated as accounting hedges:

Fair Value Hedges

Interest Rate Swaps

The Company has entered into interest rate swaps to convert the fixed interest rate on certain of its long-term debt to a floating interest rate based on the 3-month LIBOR and 6-month LIBOR. The purpose of these hedges is to mitigate the risk associated with changes in the fair value of the long-term debt, thus the Company has designated these swaps as fair value hedges. The fair value of the swaps is adjusted quarterly with a corresponding adjustment to the carrying value of the debt. The changes in the fair value of the swaps and the underlying hedged item generally offset and the net cash settlements on the swaps are recorded each period within interest expense, net in the Company’s consolidated statements of operations.

The following table summarizes the Company’s interest rate swaps designated as fair value hedges:

		Notional Amount
Hedged Item	Nature of Swap	As of June 30, 2021		As of December 31, 2020		Floating Interest Rate
2012 Senior Notes due 2022	Pay Floating/Receive Fixed	$	330	$	330	3-month USD LIBOR
2017 Senior Notes due 2023	Pay Floating/Receive Fixed	$	250	$	250	3-month USD LIBOR
2017 Senior Notes due 2028	Pay Floating/Receive Fixed	$	500	$	500	3-month USD LIBOR
2020 Senior Notes due 2025	Pay Floating/Receive Fixed	$	300	$	300	6-month USD LIBOR
Total		$	1,380	$	1,380

27

Refer to Note 16 for information on the cumulative amount of fair value hedging adjustments included in the carrying amount of the above hedged items.

The following table summarizes the impact to the statements of operations of the Company’s interest rate swaps designated as fair value hedges:

Total amounts of financial statement line item presented in the statements of operations in which the effects of fair value hedges are recorded		Amount of income/(loss) recognized in the consolidated statements of operations
		Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020
Interest expense, net		$	(49)	$	(60)	$	(56)	$	(100)
Descriptions	Location on Consolidated Statements of Operations
Net interest settlements and accruals on interest rate swaps	Interest expense, net	$	6	$	5	$	11	$	8
Fair value changes on interest rate swaps	Interest expense, net	$	—	$	2	$	(24)	$	60
Fair value changes on hedged debt	Interest expense, net	$	—	$	(2)	$	24	$	(60)

Net investment hedges

Debt designated as net investment hedges

The Company has designated €500 million of the 2015 Senior Notes Due 2027 and €750 million of the 2019 Senior Notes due 2030 as net investment hedges to mitigate FX exposure related to a portion of the Company’s euro net investment in certain foreign subsidiaries against changes in euro/USD exchange rates. These hedges are designated as accounting hedges under the applicable sections of ASC Topic 815 and will end upon the repayment of the notes in 2027 and 2030, respectively, unless terminated early at the discretion of the Company.

Cross currency swaps designated as net investment hedges

The Company enters into cross-currency swaps to mitigate FX exposure related to a portion of the Company’s euro net investment in certain foreign subsidiaries against changes in euro/USD exchange rates. The following table provides information on the cross-currency swaps designated as net investment hedges under ASC Topic 815:

June 30, 2021
	Pay			Receive
Nature of Swap	Notional Amount		Weighted Average Interest Rate	Notional Amount		Weighted Average Interest Rate
Pay Fixed/Receive Fixed	€	1,060	2.15%	$	1,220	4.45%
Pay Floating/Receive Floating	959		Based on 3-month EURIBOR	1,080		Based on 3-month USD LIBOR
Total	€	2,019		$	2,300

December 31, 2020
	Pay			Receive
Nature of Swap	Notional Amount		Weighted Average Interest Rate	Notional Amount		Weighted Average Interest Rate
Pay Fixed/Receive Fixed	€	1,079	1.43%	$	1,220	3.96%
Pay Floating/Receive Floating	959		Based on 3-month EURIBOR	1,080		Based on 3-month USD LIBOR
Total	€	2,038		$	2,300

28

As of June 30, 2021 these hedges will expire and the notional amounts will be settled as follows unless terminated early at the discretion of the Company:

Years Ending December 31,
2021 (After June 30,)	€	—
2022	€	438
2023	€	442
2024	€	443
2026	€	450
2027	€	246
Total	€	2,019

Forward contracts designated as net investment hedges

The Company also enters into forward contracts to mitigate FX exposure related to a portion of the Company’s euro net investment in certain foreign subsidiaries against changes in euro/USD and GBP/euro exchange rates. The following table summarizes the notional amounts of the Company's outstanding forward contracts that were designated as net investment hedges:

Notional amount of net investment hedges	June 30, 2021				December 31, 2020
	Sell		Buy		Sell		Buy
Contract to sell EUR for USD	€	597	$	728	€	524	$	627
Contract to sell GBP for EUR	£	134	€	155	£	134	€	148

These forward contracts will expire in August 2021.

Cash Flow Hedges

Interest Rate Forward Contracts

In January 2020, the Company entered into $300 million notional amount treasury rate locks with an average locked-in U.S. 30-year Treasury rate of 2.0103%, which were designated as cash flow hedges and used to manage the Company’s interest rate risk during the period prior to an anticipated issuance of 30-year debt. The treasury lock interest rate forward contracts matured on April 30, 2020, resulting in a cumulative loss of $68 million, which was recognized in AOCL. The loss on the Treasury rate lock will be reclassified from AOCL to earnings in the same period that the hedged transaction (i.e. interest payments on the 3.25% 2020 Senior Notes, due 2050) impacts earnings.

29

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

Derivative and Non-Derivative Instruments in Net Investment Hedging Relationships	Amount of Gain/(Loss) Recognized in AOCL on Derivative, net of Tax				Amount of Gain/(Loss) Reclassified from AOCL into Income, net of Tax				Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
	Three Months Ended June 30,				Three Months Ended June 30,				Three Months Ended June 30,
	2021		2020		2021		2020		2021		2020
FX forward contracts	$	—	$	—	$	—	$	—	$	—	$	—
Cross currency swaps	(18)		(49)		—		—		9		14
Long-term debt	(10)		(24)		—		—		—		—
Total net investment hedges	$	(28)	$	(73)	$	—	$	—	$	9	$	14
Derivatives in Cash Flow Hedging Relationships
Interest rate contracts	—		(14)		—		—		—		—
Total cash flow hedges	—		(14)		—		—		—		—
Total	$	(28)	$	(87)	$	—	$	—	$	9	$	14

Derivative and Non-Derivative Instruments in Net Investment Hedging Relationships	Amount of Gain/(Loss) Recognized in AOCL on Derivative, net of Tax				Amount of Gain/(Loss) Reclassified from AOCL into Income, net of Tax				Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
	Six Months Ended June 30,				Six Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020		2021		2020
FX forward contracts	$	16	$	—	$	1	$	—	$	—	$	—
Cross currency swaps	54		17		—		—		19		30
Long-term debt	35		(1)		—		—		—		—
Total net investment hedges	$	105	$	16	$	1	$	—	$	19	$	30
Derivatives in Cash Flow Hedging Relationships
Interest rate contracts	—		(50)		(1)		(1)		—		—
Total cash flow hedges	—		(50)		(1)		(1)		—		—
Total	$	105	$	(34)	$	—	$	(1)	$	19	$	30

30

The cumulative amount of net investment hedge and cash flow hedge gains (losses) remaining in AOCL is as follows:

	Cumulative Gains/(Losses), net of tax
	June 30, 2021		December 31, 2020
Net investment hedges
Cross currency swaps	$	(70)	$	(124)
FX forwards	27		12
Long-term debt	(73)		(108)
Total net investment hedges	$	(116)	$	(220)
Cash flow hedges
Interest rate contracts	$	(50)	$	(51)
Cross currency swaps	2		2
Total cash flow hedges	(48)		(49)
Total net loss in AOCL	$	(164)	$	(269)

Derivatives not designated as accounting hedges:

Foreign exchange forwards

The Company also enters into foreign exchange forward contracts to mitigate the change in fair value on certain assets and liabilities denominated in currencies other than a subsidiary’s functional currency. These forward contracts are not designated as accounting hedges under the applicable sections of Topic 815 of the ASC. Accordingly, changes in the fair value of these contracts are recognized immediately in other non-operating income, net in the Company’s consolidated statements of operations along with the FX gain or loss recognized on the assets and liabilities denominated in a currency other than the subsidiary’s functional currency. These contracts have expiration dates at various times through August 2021.

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

	June 30, 2021				December 31, 2020
Notional amount of currency pair:	Sell		Buy		Sell		Buy
Contracts to sell USD for GBP	$	424	£	301	$	295	£	222
Contracts to sell USD for Japanese yen	$	15	¥	1,600	$	15	¥	1,600
Contracts to sell USD for Canadian dollars	$	105	C$	129	$	107	C$	140
Contracts to sell USD for Singapore dollars	$	59	S$	79	$	59	S$	79
Contracts to sell USD for euros	$	549	€	450	$	447	€	376
Contracts to sell Euros for GBP	€	135	£	116	€	135	£	121
Contracts to sell USD for Russian ruble	$	13	₽	1,000	$	13	₽	1,000
Contracts to sell USD for Indian rupee	$	18	₹	1,350	$	18	₹	1,350

NOTE: € = euro, £ = British pound, $ = U.S. dollar, ¥ = Japanese yen, C$ = Canadian dollar, S$= Singapore dollars, ₽= Russian ruble, ₹= Indian rupee

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

Derivatives not designated as accounting hedges	Location on Consolidated Statements of Operations	Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020
Foreign exchange forwards	Other non-operating income, net	$	(1)	$	5	$	(7)	$	(35)

31

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

	Derivative and Non-Derivative Instruments
	Balance Sheet Location	June 30, 2021		December 31, 2020
Assets:
Derivatives designated as accounting hedges:
Cross-currency swaps designated as net investment hedges	Other assets	$	7	$	—
Interest rate swaps designated as fair value hedges	Other assets	37		57
FX forwards designated as net investment hedges	Other current assets	19		—
Total derivatives designated as accounting hedges		63		57
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities	Other current assets	3		31
Total assets		$	66	$	88
Liabilities:
Derivatives designated as accounting hedges:
FX forwards designated as net investment hedges	Accounts payable and accrued liabilities	$	1	$	16
Cross-currency swaps designated as net investment hedges	Accounts payable and accrued liabilities	—		23
Cross-currency swaps designated as net investment hedges	Other liabilities	80		144
Interest rate swaps designated as fair value hedges	Other liabilities	5		1
Total derivatives designated as accounting hedges		86		184
Non-derivatives designated as accounting hedges:
Long-term debt designated as net investment hedge	Long-term debt	1,482		1,530
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities	Accounts payable and accrued liabilities	26		2
Total liabilities		$	1,594	$	1,716

32

NOTE 10. GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

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

	Six Months Ended June 30, 2021
	MIS						MA						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	$	311	$	—	$	311	$	4,257	$	(12)	$	4,245	$	4,568	$	(12)	$	4,556
Additions/ adjustments (1)	—		—		—		95		—		95		95		—		95
Foreign currency translation adjustments	1		—		1		(62)		—		(62)		(61)		—		(61)
Ending balance	$	312	$	—	$	312	$	4,290	$	(12)	$	4,278	$	4,602	$	(12)	$	4,590

	Year Ended December 31, 2020
	MIS						MA						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	$	315	$	—	$	315	$	3,419	$	(12)	$	3,407	$	3,734	$	(12)	$	3,722
Additions/ adjustments (2)	(2)		—		(2)		628		—		628		626		—		626
Foreign currency translation adjustments	(2)		—		(2)		210		—		210		208		—		208
Ending balance	$	311	$	—	$	311	$	4,257	$	(12)	$	4,245	$	4,568	$	(12)	$	4,556

(1) The 2021 additions/adjustments for the MA segment in the table above relate to the acquisition of Cortera.

(2) The 2020 additions/adjustments for the MA segment in the table above relate to the acquisitions of RDC, AM, ZMFS, and Catylist.

33

Acquired intangible assets and related amortization consisted of:

	June 30, 2021		December 31, 2020
Customer relationships	$	1,611	$	1,623
Accumulated amortization	(347)		(313)
Net customer relationships	1,264		1,310
Software/product technology	442		441
Accumulated amortization	(195)		(177)
Net software/product technology	247		264
Database	181		144
Accumulated amortization	(37)		(29)
Net database	144		115
Trade names	160		161
Accumulated amortization	(42)		(38)
Net trade names	118		123
Other (1)	54		55
Accumulated amortization	(43)		(43)
Net other	11		12
Total acquired intangible assets, net	$	1,784	$	1,824

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

Amortization expense relating to acquired intangible assets is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Amortization expense	$	36	$	31	$	71	$	59

Estimated future amortization expense for acquired intangible assets subject to amortization is as follows:

Year Ending December 31,
2021 (After June 30,)	$	63
2022	133
2023	129
2024	125
2025	121
Thereafter	1,213
Total estimated future amortization	$	1,784

Matters concerning the ICRA reporting unit

ICRA has reported various matters relating to: (i) an adjudication order and fine imposed by the Securities and Exchange Board of India (SEBI) in connection with credit ratings assigned to one of ICRA’s customers and the customer’s subsidiaries, which are being appealed by ICRA; (ii) an increase in the original fine, which also is being appealed by ICRA; (iii) the completion of internal examinations regarding various anonymous complaints; and (iv) actions taken by ICRA’s board based on the examinations’ findings. As of the date of this quarterly report on Form 10-Q, 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.

34

NOTE 11. RESTRUCTURING

On December 22, 2020, the chief executive officer of Moody’s approved a restructuring program (the “2020 MA Strategic Reorganization Restructuring Program”) that the Company estimates will result in annualized savings of $20 million per year. This program relates to a strategic reorganization in the MA reportable segment consisting of severance and related costs primarily determined under the Company’s existing severance plans. The 2020 MA Strategic Reorganization Restructuring Program resulted in a total of $20 million in pre-tax charges and is substantially complete at June 30, 2021. Cash outlays associated with this program are expected to be $20 million, which will be paid through 2022.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
2020 MA Strategic Reorganization Restructuring Program	$	—	$	—	$	2	$	—

Changes to the restructuring liability for the aforementioned restructuring program during the first six months of 2021 were as follows:

	Employee Termination Costs
Balance as of December 31, 2020	$	18
2020 MA Strategic Reorganization Restructuring Program:
Cost incurred and adjustments	2
Cash payments and adjustments	(8)
Balance as of June 30, 2021	$	12
Cumulative expense incurred to date
2020 MA Strategic Reorganization Restructuring Program:	$	20

As of June 30, 2021, the remaining $12 million restructuring liability related to the 2020 MA Strategic Reorganization Restructuring Program is expected to be paid out through 2022.

NOTE 12. FAIR VALUE    

The table below presents information about items that are carried at fair value at June 30, 2021 and December 31, 2020:

	Fair value Measurement as of June 30, 2021
Description	Balance		Level 1		Level 2
Assets:
Derivatives (1)	$	66	$	—	$	66
Mutual funds	60		60		—
Total	$	126	$	60	$	66
Liabilities:
Derivatives (1)	$	112	$	—	$	112
Total	$	112	$	—	$	112

	Fair value Measurement as of December 31, 2020
Description	Balance		Level 1		Level 2
Assets:
Derivatives (1)	$	88	$	—	$	88
Mutual funds	60		60		—
Total	$	148	$	60	$	88
Liabilities:
Derivatives (1)	$	186	$	—	$	186
Total	$	186	$	—	$	186

(1) Represents FX forward contracts, interest rate swaps and cross-currency swaps as more fully described in Note 9 to the condensed consolidated financial statements.

35

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 mutual funds:

Derivatives:

In determining the fair value of the derivative contracts in the table above, the Company utilizes industry standard valuation models. Where applicable, these models project future cash flows and discount the future amounts to a present value using spot rates, forward points, currency volatilities, interest rates as well as the risk of non-performance of the Company and the counterparties with whom it has derivative contracts. The Company established strict counterparty credit guidelines and only enters into transactions with financial institutions that adhere to these guidelines. Accordingly, the risk of counterparty default is deemed to be minimal.

Mutual funds and money market mutual funds:

The mutual funds in the table above are deemed to be equity securities with readily determinable fair values with changes in the fair value recognized through net income under ASC Topic 321. The fair value of these instruments is determined using Level 1 inputs as defined in the ASC Topic 820.

36

NOTE 13. OTHER BALANCE SHEET AND STATEMENTS OF OPERATIONS INFORMATION

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

	June 30, 2021		December 31, 2020
Other current assets:
Prepaid taxes	$	125	$	94
Prepaid expenses	78		91
Capitalized costs to obtain and fulfill sales contracts	92		93
Foreign exchange forwards on certain assets and liabilities	3		31
Derivative instruments designated as accounting hedges	19		—
Other	62		74
Total other current assets	$	379	$	383
Other assets:
Investments in non-consolidated affiliates	$	151	$	135
Deposits for real-estate leases	14		19
Indemnification assets related to acquisitions	15		15
Mutual funds and fixed deposits	83		66
Company owned life insurance (at contract value)	36		17
Costs to obtain sales contracts	142		134
Derivative instruments designated as accounting hedges	44		57
Pension and other retirement employee benefits	19		21
Other	52		51
Total other assets	$	556	$	515
Accounts payable and accrued liabilities:
Salaries and benefits	$	149	$	197
Incentive compensation	134		226
Customer credits, advanced payments and advanced billings	60		42
Dividends	5		11
Professional service fees	60		53
Interest accrued on debt	72		82
Accounts payable	18		39
Income taxes	108		128
Pension and other retirement employee benefits	46		45
Accrued royalties	23		19
Foreign exchange forwards on certain assets and liabilities	26		2
Restructuring liability	12		18
Derivative instruments designated as accounting hedges	1		39
Other	102		138
Total accounts payable and accrued liabilities	$	816	$	1,039

37

	June 30, 2021		December 31, 2020
Other liabilities:
Pension and other retirement employee benefits	$	211	$	244
Interest accrued on UTPs	75		113
MAKS indemnification provisions	33		33
Income tax liability - non-current portion	18		18
Derivative instruments designated as accounting hedges	85		145
Other	38		37
Total other liabilities	$	460	$	590

Loss pursuant to the Divestiture of MAKS:

The $9 million loss during the six months ended June 30, 2020 relates to customary post-closing completion adjustments pursuant to the fourth quarter 2019 divestiture of MAKS.

Other Non-Operating Income (Expense):

The following table summarizes the components of other non-operating income (expense):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
FX gain (loss)	$	2	$	(8)	$	—	$	5
Net periodic pension costs - other components (1)	(3)		4		1		7
Income/(loss) from investments in non-consolidated affiliates	1		3		9		—
Other	6		17		12		16
Total	$	6	$	16	$	22	$	28
(1) The amounts for the three and six months ended June 30, 2021 include a $7 million loss related to a settlement of pension obligations

38

NOTE 14. COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table provides details about the reclassifications out of AOCL:

	Three Months Ended June 30,				Location in the consolidated statements of operations
	2021		2020
Gains on net investment hedges
FX forwards	$	1	$	—	Other non-operating income, net
Income tax effect of item above	(1)		—		Provision for income taxes
Total net gains on net investment hedges	—		—
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income	(3)		(1)		Other non-operating income, net
Settlement charge	(7)		—		Other non-operating income, net
Total before income taxes	(10)		(1)
Income tax effect of items above	2		—		Provision for income taxes
Total pension and other retirement benefits	(8)		(1)
Total net losses included in Net Income attributable to reclassifications out of AOCL	$	(8)	$	(1)

	Six Months Ended June 30,				Location in the consolidated statements of operations
Losses on cash flow hedges	2021		2020
Interest rate contract	$	(1)	$	(1)	Other non-operating income, net
Income tax effect of item above	—		—		Provision for income taxes
Total net losses on cash flow hedges	(1)		(1)
Gains on net investment hedges
FX forwards	2		—		Other non-operating income, net
Income tax effect of item above	(1)		—		Provision for income taxes
Total net gains on net investment hedges	1		—
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income	(6)		(3)		Other non-operating income, net
Settlement charge	(7)		—		Other non-operating income, net
Total before income taxes	(13)		(3)
Income tax effect of items above	3		1		Provision for income taxes
Total pension and other retirement benefits	(10)		(2)
Total net losses included in Net Income attributable to reclassifications out of AOCL	$	(10)	$	(3)

39

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

	Three Months Ended June 30,
	2021										2020
Gains/(Losses)	Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total		Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total
Balance March 31,	$	(116)	$	(48)	$	(188)	$	(88)	$	(440)	$	(92)	$	(35)	$	(570)	$	143	$	(554)
Other comprehensive income/(loss) before reclassifications	—		—		36		(29)		7		7		(14)		91		(73)		11
Amounts reclassified from AOCL	8		—		—		—		8		1		—		—		—		1
Other comprehensive income/(loss)	8		—		36		(29)		15		8		(14)		91		(73)		12
Balance June 30,	$	(108)	$	(48)	$	(152)	$	(117)	$	(425)	$	(84)	$	(49)	$	(479)	$	70	$	(542)

	Six Months Ended June 30,
	2021										2020
Gains/(Losses)	Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total		Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total
Balance December 31,	$	(118)	$	(49)	$	(45)	$	(220)	$	(432)	$	(92)	$	—	$	(401)	$	54	$	(439)
Other comprehensive income/(loss) before reclassifications	—		—		(107)		104		(3)		6		(50)		(78)		16		(106)
Amounts reclassified from AOCL	10		1		—		(1)		10		2		1		—		—		3
Other comprehensive income/(loss)	10		1		(107)		103		7		8		(49)		(78)		16		(103)
Balance June 30,	$	(108)	$	(48)	$	(152)	$	(117)	$	(425)	$	(84)	$	(49)	$	(479)	$	70	$	(542)

40

NOTE 15. PENSION AND OTHER RETIREMENT BENEFITS

Moody’s maintains funded and unfunded noncontributory DBPPs. The DBPPs provide defined benefits using a cash balance formula based on years of service and career average salary for its employees 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”. The U.S. retirement healthcare plans and the U.S. retirement life insurance plans are collectively referred to herein as the “Other Retirement Plans.” The non-U.S. defined benefit pension plans are immaterial.

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 formulas.

The components of net periodic benefit expense related to the Retirement Plans and Other Retirement Plans are as follows:

	Three Months Ended June 30,
	Pension Plans				Other Retirement Plans
	2021		2020		2021		2020
Components of net periodic expense
Service cost	$	5	$	3	$	1	$	1
Interest cost	3		5		1		—
Expected return on plan assets	(6)		(5)		—		—
Amortization of net actuarial loss from earlier periods	3		1		—		—
Loss on settlement of pension obligation	7		—		—		—
Net periodic expense	$	12	$	4	$	2	$	1

	Six Months Ended June 30,
	Pension Plans				Other Retirement Plans
	2021		2020		2021		2020
Components of net periodic expense
Service cost	$	10	$	8	$	2	$	2
Interest cost	7		9		1		—
Expected return on plan assets	(13)		(10)		—		—
Amortization of net actuarial loss from earlier periods	5		3		—		—
Loss on settlement of pension obligation	7		—		—		—
Net periodic expense	$	16	$	10	$	3	$	2

The Company made contributions of $41 million related to its unfunded U.S. DBPPs during the six months ended June 30, 2021. Actual and anticipated contributions in 2021 for the remaining plans are not expected to be material.

41

NOTE 16. INDEBTEDNESS

The Company’s debt is recorded at its carrying amount, which represents the issuance amount plus or minus any issuance premium or discount, except for the 2012 Senior Notes due 2022, the 2017 Senior Notes due 2023, the 2017 Senior Notes due 2028 and the 2020 Senior Notes due 2025, which are 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:

June 30, 2021
Notes Payable:	Principal Amount		Fair Value of Interest Rate Swaps (1)		Unamortized (Discount) Premium		Unamortized Debt Issuance Costs		Carrying Value
4.50% 2012 Senior Notes, due 2022	$	500	$	10	$	—	$	—	$	510
4.875% 2013 Senior Notes, due 2024	500		—		(1)		(1)		498
5.25% 2014 Senior Notes, due 2044	600		—		3		(5)		598
1.75% 2015 Senior Notes, due 2027	593		—		—		(2)		591
2.625% 2017 Senior Notes, due 2023	500		9		—		(1)		508
3.25% 2017 Senior Notes, due 2028	500		18		(4)		(3)		511
4.25% 2018 Senior Notes, due 2029	400		—		(2)		(3)		395
4.875% 2018 Senior Notes, due 2048	400		—		(6)		(4)		390
0.950% 2019 Senior Notes, due 2030	889		—		(3)		(6)		880
3.75% 2020 Senior Notes, due 2025	700		(5)		(1)		(4)		690
3.25% 2020 Senior Notes, due 2050	300		—		(4)		(3)		293
2.55% 2020 Senior Notes, due 2060	500		—		(4)		(5)		491
Total long-term debt	$	6,382	$	32	$	(22)	$	(37)	$	6,355

December 31, 2020
Notes Payable:	Principal Amount		Fair Value of Interest Rate Swaps (1)		Unamortized (Discount) Premium		Unamortized Debt Issuance Costs		Carrying Value
4.50% 2012 Senior Notes, due 2022	$	500	$	14	$	(1)	$	(1)	$	512
4.875% 2013 Senior Notes, due 2024	500		—		(1)		(1)		498
5.25% 2014 Senior Notes, due 2044	600		—		3		(5)		598
1.75% 2015 Senior Notes, due 2027	612		—		—		(2)		610
2.625% 2017 Senior Notes, due 2023	500		12		—		(2)		510
3.25% 2017 Senior Notes, due 2028	500		31		(4)		(3)		524
4.25% 2018 Senior Notes, due 2029	400		—		(3)		(3)		394
4.875% 2018 Senior Notes, due 2048	400		—		(6)		(4)		390
0.950% 2019 Senior Notes, due 2030	918		—		(3)		(6)		909
3.75% 2020 Senior Notes, due 2025	700		(1)		(1)		(5)		693
3.25% 2020 Senior Notes, due 2050	300		—		(4)		(3)		293
2.55% 2020 Senior Notes, due 2060	500		—		(4)		(5)		491
Total long-term debt	$	6,430	$	56	$	(24)	$	(40)	$	6,422

(1) The fair value of interest rate swaps in the table above represents the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged debt.

Notes Payable

At June 30, 2021, the Company was in compliance with all covenants contained within all of the debt agreements. All 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 June 30, 2021, there were no such cross defaults.

42

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

Year Ending December 31,	2012 Senior Notes due 2022		2013 Senior Notes due 2024		2014 Senior Notes due 2044		2015 Senior Notes due 2027		2017 Senior Notes due 2023		2017 Senior Notes due 2028		2018 Senior Notes due 2029		2018 Senior Notes due 2048		2019 Senior Notes due 2030		2020 Senior Notes due 2025		2020 Senior Notes due 2050		2020 Senior Notes due 2060		Total
2021 (After June 30,)	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2022	500		—		—		—		—		—		—		—		—		—		—		—		500
2023	—		—		—		—		500		—		—		—		—		—		—		—		500
2024	—		500		—		—		—		—		—		—		—		—		—		—		500
2025	—		—		—		—		—		—		—		—		—		700		—		—		700
Thereafter	—		—		600		593		—		500		400		400		889		—		300		500		4,182
Total	$	500	$	500	$	600	$	593	$	500	$	500	$	400	$	400	$	889	$	700	$	300	$	500	$	6,382

Interest expense, net

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Income	$	1	$	3	$	4	$	7
Expense on borrowings	(41)		(48)		(82)		(79)
Income (expense) on UTPs and other tax related liabilities(2)	(5)		(10)		30		(18)
Net periodic pension costs - interest component	(4)		(5)		(8)		(10)
Interest expense, net	$	(49)	$	(60)	$	(56)	$	(100)
Interest paid(1)	$	13	$	23	$	86	$	72

(1) Interest paid includes net settlements on interest rate swaps more fully discussed in Note 9.

(2) Income (expense) on UTPs and other tax related liabilities for the six months ended June 30, 2021 includes a $40 million benefit relating to the reversal of tax-related interest accruals pursuant to the resolution of tax matters.

The fair value and carrying value of the Company’s debt as of June 30, 2021 and December 31, 2020 are as follows:

	June 30, 2021				December 31, 2020
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
4.50% 2012 Senior Notes, due 2022	$	510	$	522	$	512	$	530
4.875% 2013 Senior Notes, due 2024	498		551		498		562
5.25% 2014 Senior Notes, due 2044	598		808		598		828
1.75% 2015 Senior Notes, due 2027	591		643		610		674
2.625% 2017 Senior Notes, due 2023	508		516		510		522
3.25% 2017 Senior Notes, due 2028	511		550		524		561
4.25% 2018 Senior Notes, due 2029	395		465		394		480
4.875% 2018 Senior Notes, due 2048	390		527		390		544
0.950% 2019 Senior Notes, due 2030	880		919		909		974
3.75% 2020 Senior Notes, due 2025	690		768		693		785
3.25% 2020 Senior Notes, due 2050	293		313		293		329
2.55% 2020 Senior Notes, due 2060	491		442		491		467
Total	$	6,355	$	7,024	$	6,422	$	7,256

The fair value of the Company’s long-term debt is estimated based on quoted market prices for similar instruments. Accordingly, the inputs used to estimate the fair value of the Company’s long-term debt are classified as Level 2 inputs within the fair value hierarchy.

43

NOTE 17. LEASES

The Company has operating leases, substantially all of which relate to the lease of office space. The Company’s leases which are classified as finance leases are not material to the consolidated financial statements. Certain of the Company’s leases include options to renew, with renewal terms that can extend the lease term from one year to 20 years at the Company’s discretion.

The following table presents the components of the Company’s lease cost:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Operating lease cost	$	23	$	24	$	47	$	48
Sublease income	(1)		(1)		(2)		(2)
Variable lease cost	5		5		10		10
Total lease cost	$	27	$	28	$	55	$	56

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cash paid for amounts included in the measurement of operating lease liabilities	$	28	$	27	$	56	$	53
Right-of-use assets obtained in exchange for new operating lease liabilities	$	2	$	11	$	6	$	20

	June 30, 2021		June 30, 2020
Weighted-average remaining lease term	5.6 years		6.5 years
Weighted-average discount rate applied to operating leases	3.6	%	3.6	%

The following table presents a maturity analysis of the future minimum lease payments included within the Company’s operating lease liabilities at June 30, 2021:

Year Ending December 31,	Operating Leases
2021 (After June 30)	$	55
2022	100
2023	94
2024	85
2025	77
After 2025	117
Total lease payments (undiscounted)	528
Less: Interest	50
Present value of lease liabilities:	$	478
Lease liabilities - current	$	92
Lease liabilities - noncurrent	$	386

44

NOTE 18. CONTINGENCIES

Given the nature of the Company's activities, Moody’s and its subsidiaries are subject to legal and tax proceedings, governmental, regulatory and legislative investigations, subpoenas and other inquiries, and claims and litigation by governmental and private parties that are based on ratings assigned by MIS or that are otherwise incidental to the Company’s business. Moody’s and MIS also are subject to periodic reviews, inspections, examinations and investigations by regulators in the U.S. and other jurisdictions, any of which may result in claims, legal proceedings, assessments, fines, penalties or restrictions on business activities. Moody’s also is subject to ongoing tax audits as addressed in Note 5 to the consolidated financial statements.

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

In view of the inherent difficulty of assessing the potential outcome of legal proceedings, governmental, regulatory and legislative investigations and inquiries, claims and litigation and similar matters and contingencies, particularly when the claimants seek large or indeterminate damages or assert novel legal theories or the matters involve a large number of parties, the Company often cannot predict what the eventual outcome of the pending matters will be or the timing of any resolution of such matters. The Company also may be unable to predict the impact (if any) that any such matters may have on how its business is conducted, on its competitive position or on its financial position, results of operations or cash flows. As the process to resolve any pending matters progresses, management will continue to review the latest information available and assess its ability to predict the outcome of such matters and the effects, if any, on its operations and financial condition and to accrue for and disclose such matters as and when required. However, because such matters are inherently unpredictable and unfavorable developments or resolutions can occur, the ultimate outcome of such matters, including the amount of any loss, may differ from those estimates.

NOTE 19. SEGMENT INFORMATION

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

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 ESG research, data and assessments.

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 two LOBs - RD&A and ERS.

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. Additionally, 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. These intersegment fees are generally based on the market value of the products and services being transferred between the segments.

Overhead expenses include costs such as rent and occupancy, information technology and support staff such as finance, human resources and legal. Such costs and corporate expenses that exclusively benefit one segment are fully charged to that segment.

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

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

45

Financial Information by Segment

The table below shows revenue, operating income and Adjusted 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.

	Three Months Ended June 30,
	2021								2020
	MIS		MA		Eliminations		Consolidated		MIS		MA		Eliminations		Consolidated
Revenue	$	1,022	$	575	$	(44)	$	1,553	$	973	$	499	$	(37)	$	1,435
Total Expenses	362		434		(44)		752		369		393		(37)		725
Operating income	660		141		—		801		604		106		—		710
Add:
Depreciation and amortization	18		42		—		60		19		39		—		58
Restructuring	—		—		—		—		—		(2)		—		(2)
Adjusted Operating Income	$	678	$	183	$	—	$	861	$	623	$	143	$	—	$	766

	Six Months Ended June 30,
	2021								2020
	MIS		MA		Eliminations		Consolidated		MIS		MA		Eliminations		Consolidated
Revenue	$	2,098	$	1,141	$	(86)	$	3,153	$	1,804	$	997	$	(76)	$	2,725
Total Expenses	728		857		(86)		1,499		712		787		(76)		1,423
Operating income	1,370		284		—		1,654		1,092		210		—		1,302
Add:
Depreciation and amortization	36		83		—		119		35		72		—		107
Restructuring	—		2		—		2		(1)		(2)		—		(3)
Loss pursuant to the divestiture of MAKS	—		—		—		—		—		9		—		9
Adjusted Operating Income	$	1,406	$	369	$	—	$	1,775	$	1,126	$	289	$	—	$	1,415

Consolidated Revenue Information by Geographic Area

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
United States	$	831	$	837	$	1,716	$	1,551
Non-U.S.:
EMEA	481		373		959		736
Asia-Pacific	155		144		311		280
Americas	86		81		167		158
Total Non-U.S.	722		598		1,437		1,174
Total	$	1,553	$	1,435	$	3,153	$	2,725

NOTE 20. SUBSEQUENT EVENT

On July 27, 2021, the Board approved the declaration of a quarterly dividend of $0.62 per share of Moody’s common stock, payable on September 10, 2021 to shareholders of record at the close of business on August 20, 2021.

46

Item 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis of financial condition and results of operations should be read in conjunction with the Moody’s Corporation condensed consolidated financial statements and notes thereto included elsewhere in this quarterly report on Form 10-Q.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains Forward-Looking Statements. See “Forward-Looking Statements” commencing on page 81 for a discussion of uncertainties, risks and other factors associated with these statements.

THE COMPANY

Moody’s is a global integrated risk assessment firm that empowers organizations and investors to make better decisions. Moody’s reports in two segments: MIS and MA.

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 in 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.

MA is a global provider of data and analytic solutions which help companies make better and faster decisions. MA’s analytic models, industry insights, software tools and proprietary data assets allow companies to inform and perform many critical business activities with trust and confidence. MA’s approach to aggregating, broadening and deepening available data, research, analytic tools and software solutions fosters a more integrated and efficient delivery to MA's customers resulting in better decisions around risks and opportunities.

Sustainability

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 sustainability by considering environmental, social, and governance (“ESG”) factors throughout its operations and 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 recognized sustainability organizations that develop standards or frameworks and/or evaluate and assess performance, including the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and most recently World Economic Forum (WEF). Moody's also issues an annual report on how the Company has implemented the Task Force on Climate-related Financial Disclosures (“TCFD”) recommendations. In the second quarter of 2021, Moody's published its progress through Moody's 2020 Stakeholder Sustainability Report, 2020 TCFD Report, 2020 GRI Report, 2020 SASB Report and 2020 WEF Report.

The Board oversees sustainability matters, with assistance from the Audit and Governance & Nominating Committees, as part of its oversight of management and the Company’s overall strategy.

COVID-19

The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its business. The Company continues to monitor regional developments relating to the COVID-19 pandemic to inform decisions on the reopening of its offices and its business travel policies. The Company has selectively reopened certain of its offices, most on a limited capacity basis.

The COVID-19 pandemic has not had a material adverse impact on the Company's reported results to date and is currently not expected to have a material adverse impact on its near-term outlook. However, Moody's is unable to predict the longer-term impact that the pandemic may have on its business, future results of operations, financial position or cash flows due to numerous uncertainties. Refer to Item 1A. “Risk Factors”, contained in the Company’s annual report on Form 10-K for the year ended December 31, 2020 for further disclosure relating to the risks of the COVID-19 pandemic on the Company's business.

47

Critical Accounting Estimates

Moody’s discussion and analysis of its financial condition and results of operations are based on the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires Moody’s to make estimates and judgments that affect reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the dates of the financial statements and revenue and expenses during the reporting periods. These estimates are based on historical experience and on other assumptions that are believed to be reasonable under the circumstances. On an ongoing basis, Moody’s evaluates its estimates, including those related to revenue recognition, accounts receivable allowances, contingencies, restructuring, goodwill and acquired intangible assets, pension and other retirement benefits, stock-based compensation, and income taxes. Actual results may differ from these estimates under different assumptions or conditions. Item 7, MD&A, in the Company’s annual report on Form 10-K for the year ended December 31, 2020, includes descriptions of some of the judgments that Moody’s makes in applying its accounting estimates in these areas. Since the date of the annual report on Form 10-K, there have been no material changes to the Company’s critical accounting estimates other than certain updates below relating to goodwill resulting from a reorganization of reporting units in the MA segment.

Goodwill

This update should be read in conjunction with the critical accounting estimate disclosures made in the Company's Form 10-K for the year ended December 31, 2020.

Prior to the second quarter of 2021, MA's reporting unit structure consisted of five reporting units (Content, ERS, MALS, Bureau van Dijk and Reis). Pursuant to a strategic reorganization in the MA segment which was completed in the second quarter of 2021, MA's reporting unit structure has been reorganized into two reporting units. MA’s two new reporting units generally consist of: i) businesses offering data and data-driven analytical solutions; and ii) risk-management software, workflow and CRE solutions. This reorganization did not result in a change to the Company's reportable segments.

The Company performed qualitative assessments of the reporting units impacted by the reorganization immediately before and after the reorganization became effective. These qualitative assessments resulted in the Company determining that it was not more likely than not that the fair value of any reporting unit was less than its carrying amount.

The Company will perform a quantitative assessment on the new reporting units as of July 31, 2021, the date of the Company’s annual goodwill impairment assessment, which will provide new baseline valuations under the new reporting unit structure.

Reportable Segments

The Company is organized into two reportable segments at June 30, 2021: MIS and MA, which are more fully described in the section entitled “The Company” above and in Note 19 to the condensed consolidated financial statements.

48

RESULTS OF OPERATIONS

Impact of acquisitions/divestitures on comparative results

–Moody’s completed the following acquisitions, which impact the Company's year-over-year comparative results:

–Regulatory DataCorp on February 13, 2020;

–Acquire Media on October 21, 2020;

–ZM Financial Systems on December 7, 2020;

–Catylist on December 30, 2020; and

–Cortera on March 19, 2021.

Refer to the section entitled "Non-GAAP Financial Measures" of this MD&A for the definitions of how the Company determines certain organic growth measures used in this MD&A that exclude the impact of acquisition/divestiture activity.

49

Three months ended June 30, 2021 compared with three months ended June 30, 2020

Executive Summary

–The following table provides an executive summary of key operating results for the quarter ended June 30, 2021. Following this executive summary is a more detailed discussion of the Company’s operating results as well as a discussion of the operating results of the Company’s reportable segments.

	Three Months Ended June 30,
Financial measure:	2021			2020			% Change Favorable (Unfavorable)		Insight and Key Drivers of Change Compared to Prior Year
Moody's total revenue	$	1,553		$	1,435		8	%	— reflects strong growth in both segments.
MIS External Revenue	$	980		$	938		4	%	— strong growth in leveraged finance issuance as issuers continued to take advantage of favorable market conditions to refinance existing debt and fund M&A activity; and — favorable changes in FX translation rates;  partially offset by: — declines in investment-grade rated issuance volumes compared to a strong prior year period
MA External Revenue	$	573		$	497		15	%	— strong growth in KYC and compliance solutions, as well as research and data feeds; — ongoing recurring revenue growth in ERS from subscription-based sales to banking, insurance and asset management customers; — favorable changes in FX translation rates; and — inorganic growth from acquisitions.
Total operating and SG&A expenses	$	692		$	669		(3	%)	— growth in compensation costs mainly reflecting higher incentive and stock-based compensation accruals aligned with operating performance; — unfavorable changes in FX translation rates; and — inorganic expense growth from acquisitions;  partially offset by: — lower legal accruals.
Total non-operating (expense) income, net	$	(43)		$	(44)		2	%	— generally in line with prior year
Operating Margin	51.6		%	49.5		%	210BPS		— margin expansion reflects strong revenue growth outpacing operating expense growth
Adjusted Operating Margin	55.4		%	53.4		%	200BPS
ETR	23.9		%	23.6		%	(30BPS)		— generally in line with prior year
Diluted EPS	$	3.07		$	2.69		14	%	— increase reflects aforementioned strong operating income/Adjusted Operating Income growth
Adjusted Diluted EPS	$	3.22		$	2.81		15	%

50

Moody's Corporation

	Three Months Ended June 30,						% Change Favorable (Unfavorable)
	2021			2020
Revenue:
United States	$	831		$	837		(1	%)
Non-U.S.:
EMEA	481			373			29	%
Asia-Pacific	155			144			8	%
Americas	86			81			6	%
Total Non-U.S.	722			598			21	%
Total	1,553			1,435			8	%
Expenses:
Operating	365			362			(1	%)
SG&A	327			307			(7	%)
Depreciation and amortization	60			58			(3	%)
Restructuring	—			(2)			NM
Total	752			725			(4	%)
Operating income	$	801		$	710		13	%
Adjusted Operating Income (1)	$	861		$	766		12	%
Interest expense, net	$	(49)		$	(60)		18	%
Other non-operating income, net	6			16			(63	%)
Non-operating (expense) income, net	$	(43)		$	(44)		2	%
Net income attributable to Moody's	$	577		$	509		13	%
Diluted weighted average shares outstanding	187.9			189.0			1	%
Diluted EPS attributable to Moody's common shareholders	$	3.07		$	2.69		14	%
Adjusted Diluted EPS (1)	$	3.22		$	2.81		15	%
Operating margin	51.6		%	49.5		%
Adjusted Operating Margin(1)	55.4		%	53.4		%
Effective tax rate	23.9		%	23.6		%

(1) Adjusted Operating Income, Adjusted Operating Margin and Adjusted Diluted EPS are non-GAAP financial measures. Refer to the section entitled "Non-GAAP Financial Measures" of this Management Discussion and Analysis for further information regarding these measures.

51

The table below shows Moody’s global staffing by geographic area:

		June 30,		Change
		2021	2020	%
MIS
	U.S.	1,441	1,518	(5	%)
	Non-U.S.	3,586	3,467	3	%
	Total	5,027	4,985	1	%
MA
	U.S.	2,039	1,831	11	%
	Non-U.S.	2,921	3,036	(4	%)
	Total	4,960	4,867	2	%
MSS
	U.S.	679	703	(3	%)
	Non-U.S.	876	724	21	%
	Total	1,555	1,427	9	%
Total MCO
	U.S.	4,159	4,052	3	%
	Non-U.S.	7,383	7,227	2	%
	Total	11,542	11,279	2	%

Moody’s global staffing increased by approximately 240 employees relating to acquisitions completed subsequent to June 30, 2020.

GLOBAL REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

Global revenue ⇑ $118 million U.S. Revenue ⇓ $6 million Non-U.S. Revenue ⇑ $124 million

The increase in global revenue reflected growth across all regions for MA and growth internationally in MIS. This growth was partially offset by declines in U.S. MIS revenue compared to a strong prior year. Refer to the section entitled “Segment Results” of this MD&A for a more fulsome discussion of the Company’s segment revenue.

–Foreign currency translation favorably impacted global revenue by three percent.

52

Operating Expense ⇑ $3 million SG&A Expense ⇑ $20 million

---------- ---------    

Compensation expenses increased $7 million reflecting:	Compensation expenses increased $30 million reflecting:
— higher incentive and stock-based compensation accruals aligned with actual/projected financial and operating performance. Incentive compensation accruals in 2020 were lower reflecting uncertainties at the time relating to the COVID-19 pandemic;	— higher incentive and stock-based compensation accruals aligned with actual/projected financial and operating performance. Incentive compensation accruals in 2020 were lower reflecting uncertainties at the time relating to the COVID-19 pandemic;
— hiring and salary increases, including inorganic growth of acquisitions; and	— hiring and salary increases, including inorganic growth of acquisitions; and
— unfavorable changes in FX translation rates	— unfavorable changes in FX translation rates
Non-compensation expenses decreased $4 million reflecting:	Non-compensation expenses decreased $10 million reflecting:
— ongoing disciplined cost management; mostly offset by: — higher costs relating to strategic initiatives to support business growth coupled with enhancements to technology infrastructure to enable automation, innovation and efficiency; and —inorganic growth from acquisitions	— lower legal accruals;
	— ongoing disciplined cost management; partially offset by:
	— higher costs relating to strategic initiatives to support business growth coupled with enhancements to technology infrastructure to enable automation, innovation and efficiency; and — inorganic growth from acquisitions

Operating margin 51.6%, up 210 BPS Adjusted Operating Margin 55.4%, up 200 BPS

Operating margin and Adjusted Operating Margin expansion reflects revenue growth outpacing growth in total operating expenses.

Interest Expense, net ⇓ $11 million Other non-operating income ⇓ $10 million

Decrease in expense is primarily due to:	Decrease in income is primarily due to:
— an $8 million prepayment penalty in the second quarter of 2020 related to the early redemption of the 2018 Senior Notes.	— a $9 million benefit in 2020 relating to statute of limitations lapses on certain indemnification obligations relating to the MAKS divestiture; and
	— a $7 million loss on the settlement of pension obligations in 2021 resulting from lump sum distributions from the Company's defined benefit pension plans; partially offset by:
	— $2 million in FX gains in 2021 compared to $8 million in FX losses in the prior year.

ETR ⇑ 30 BPS

The 2021 ETR was generally in line with prior year.

53

Diluted EPS ⇑ $0.38 Adjusted Diluted EPS ⇑ $0.41

Diluted EPS in the second quarter of 2021 of $3.07 increased $0.38 compared to the same period in 2020 mainly due to higher operating income. Adjusted Diluted EPS of $3.22 in the second quarter of 2021 increased $0.41 compared to the same period in 2020, mainly due to higher Adjusted Operating Income. Refer to the section entitled “Non-GAAP Financial Measures” of this MD&A for items excluded in the derivation of Adjusted Diluted EPS.

Segment Results

Moody’s Investors Service

The table below provides a summary of revenue and operating results, followed by further insight and commentary:

	Three Months Ended June 30,						% Change Favorable (Unfavorable)
	2021			2020
Revenue:
Corporate finance (CFG)	$	550		$	572		(4	%)
Financial institutions (FIG)	150			142			6	%
Public, project and infrastructure finance (PPIF)	130			133			(2	%)
Structured finance (SFG)	140			81			73	%
Total ratings revenue	970			928			5	%
MIS Other	10			10			—	%
Total external revenue	980			938			4	%
Intersegment revenue	42			35			20	%
Total MIS revenue	1,022			973			5	%
Expenses:
Operating and SG&A (external)	342			348			2	%
Operating and SG&A (intersegment)	2			2			—	%
Depreciation and amortization	18			19			5	%
Total expense	362			369			2	%
Operating Income	$	660		$	604		9	%
Depreciation and amortization	18			19			5	%
Adjusted Operating Income	$	678		$	623		9	%
Operating margin	64.6		%	62.1		%
Adjusted Operating Margin	66.3		%	64.0		%

54

MOODY'S INVESTORS SERVICE REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

MIS: Global revenue ⇑ $42 million U.S. Revenue ⇓ $34 million Non-U.S. Revenue ⇑ $76 million

–The increase in global MIS revenue reflected growth across all LOBs internationally partially offset by declines in the U.S. compared to a strong comparative prior year.

–Foreign currency translation favorably impacted MIS revenue by two percentage points.

–Transaction revenue grew $22 million compared to the same period in the prior year.

CFG REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

CFG: Global revenue ⇓ $22 million U.S. Revenue ⇓ $68 million Non-U.S. Revenue ⇑ $46 million

Global CFG revenue for the three months ended June 30, 2021 and 2020 was comprised as follows:

(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.

55

The decrease in CFG revenue of 4% reflected declines in the U.S. (16%) partially offset by growth internationally (29%). The most notable drivers of the change compared to 2020 were:

–declines in investment-grade rated issuance volumes in all regions, most notably in the U.S., compared to very strong issuance in the prior year period when large corporate issuers opportunistically bolstered their liquidity positions in light of uncertainties surrounding the COVID-19 crisis;

partially offset by:

–strong growth in leveraged loan and speculative-grade bond activity in the U.S. and EMEA as issuers refinanced existing debt in light of favorable market conditions and funded M&A activity.

Transaction revenue declined $30 million compared to the same period in the prior year. Foreign currency translation favorably impacted CFG revenue by two percentage points.

FIG REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

FIG: Global revenue ⇑ $8 million U.S. Revenue ⇓ $1 million Non-U.S. Revenue ⇑ $9 million

Global FIG revenue for the three months ended June 30, 2021 and 2020 was comprised as follows:

Transaction revenue increased $3 million compared to the second quarter of 2020.

The most notable drivers of the 6% increase in FIG revenue were:

–higher banking revenue in the U.S. and EMEA mainly reflecting a favorable change in product mix and pricing increases;

partially offset by

–lower U.S. insurance revenue as insurers had fortified their balance sheets in the prior year in response to uncertainties related to the COVID-19 crisis.

Foreign currency translation favorably impacted FIG revenue by three percentage points.

56

PPIF REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

PPIF: Global revenue ⇓ $3 million U.S. Revenue ⇓ $8 million Non-U.S. Revenue ⇑ $5 million

Global PPIF revenue for the three months ended June 30, 2021 and 2020 was comprised as follows:

Transaction revenue decreased $8 million compared to the second quarter of 2020.

The modest decline in PPIF revenue of 2% reflected a decrease in the U.S. (9%) partially offset by growth internationally (11%).

The decrease in revenue was mainly a result of a strong prior year comparative period in infrastructure finance where issuers were bolstering their balance sheets in response to uncertainties relating to the COVID-19 crisis.

Foreign currency translation favorably impacted PPIF revenue by two percentage points.

SFG REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

57

SFG: Global revenue ⇑ $59 million U.S. Revenue ⇑ $43 million Non-U.S. Revenue ⇑ $16 million

Global SFG revenue for the three months ended June 30, 2021 and 2020 was comprised as follows:

The 73% increase in SFG revenue reflected growth both in the U.S. (96%) and internationally (44%). Transaction revenue increased $57 million compared to the second quarter of 2020.

The most notable drivers of the growth in SFG revenue were:

–higher CLO refinancing and securitization activity in the U.S. and EMEA as market conditions remain favorable for this asset class; and

–an increase in U.S. CMBS activity reflecting a narrowing of credit spreads for this asset class compared to a challenging prior year period when securitization activity for retail and hotel properties was adversely impacted by the COVID-19 crisis.

Foreign currency translation favorably impacted SFG revenue by five percentage points.

MIS: Operating and SG&A Expense ⇓ $6 million

    

The modest decline is primarily due to lower non-compensation costs of $22 million partially offset by higher compensation costs of $16 million with most notable drivers reflecting:

Compensation costs	Non-compensation costs
The increase is primarily due to:	The decrease is primarily due to:
— higher incentive and stock-based compensation accruals aligned with actual/projected financial and operating performance. Incentive compensation accruals in 2020 were lower reflecting uncertainties at the time relating to the COVID-19 pandemic; and — unfavorable changes in FX translation rates	— lower legal accruals; partially offset by: — unfavorable changes in FX translation rates

MIS: Operating Margin 64.6% ⇑ 250 BPS Adjusted Operating Margin 66.3% ⇑ 230 BPS

MIS operating margin and Adjusted Operating Margin both increased reflecting strong revenue growth coupled with a decline in operating and SG&A expenses.

58

Moody’s Analytics

The table below provides a summary of revenue and operating results, followed by further insight and commentary:

	Three Months Ended June 30,						% Change Favorable (Unfavorable)
	2021			2020
Revenue:
Research, data and analytics (RD&A)	$	435		$	366		19	%
Enterprise risk solutions (ERS)	138			131			5	%
Total external revenue	573			497			15	%
Intersegment revenue	2			2			—	%
Total MA revenue	575			499			15	%
Expenses:
Operating and SG&A (external)	350			321			(9	%)
Operating and SG&A (intersegment)	42			35			(20	%)
Depreciation and amortization	42			39			(8	%)
Restructuring	—			(2)			NM
Total expense	434			393			(10	%)
Operating income	$	141		$	106		33	%
Depreciation and amortization	42			39			(8	%)
Restructuring	—			(2)			NM
Adjusted Operating Income	$	183		$	143		28	%
Operating margin	24.5		%	21.2		%
Adjusted Operating Margin	31.8		%	28.7		%

59

MOODY'S ANALYTICS REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

MA: Global revenue ⇑ $76 million U.S. Revenue ⇑ $28 million Non-U.S. Revenue ⇑ $48 million

The 15% increase in global MA revenue reflects growth both in the U.S. and internationally in both LOBs and includes revenue from the acquisitions of AM, ZMFS, Catylist and Cortera.

–Organic revenue growth (1) was 13%.

–Foreign currency translation favorably impacted MA revenue by five percent.

(1) Refer to the section entitled "Non-GAAP Financial Measures" of this MD&A for the definition and methodology that the Company utilizes to calculate this metric.

RD&A REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

    

RD&A: Global revenue ⇑ $69 million U.S. Revenue ⇑ $23 million Non-U.S. Revenue ⇑ $46 million

Global RD&A revenue grew 19% compared to the second quarter of 2020 with the most notable drivers of the change reflecting:

–continued demand for KYC and compliance solutions reflecting increased customer and supplier risk data usage;

–strong renewals and new sales related to credit research and data feeds; and

–inorganic revenue growth from the acquisitions of AM, Catylist, and Cortera.

Foreign currency translation favorably impacted RD&A revenue by five percent.

Organic revenue growth for RD&A was 16%.

60

ERS REVENUE

2021-----------------------------------------------------------------------------------2020

_____________________________________________________________________________________________________________________

ERS: Global revenue ⇑ $7 million U.S. Revenue ⇑ $5 million Non-U.S. Revenue ⇑ $2 million

Global ERS revenue increased 5% compared to the second quarter of 2020 mainly driven by:

–growth in subscription-based revenue, most notably for actuarial modeling tools in support of certain international accounting standards relating to insurance contracts and demand from asset managers for risk management solutions;

–Favorable foreign currency translation which impacted revenue by four percent; and

–inorganic revenue growth from the acquisition of ZMFS;

partially offset by:

–lower non-recurring software revenue and services due to a de-emphasizing of these lower margin offerings.

Organic revenue growth for ERS was 3%.

MA: Operating and SG&A Expense ⇑ $29 million

The increase in operating and SG&A expenses compared to the second quarter of 2020 reflected growth in compensation costs of $21 million and in non-compensation costs of $8 million. The most notable drivers of these increases were:

Compensation costs	Non-compensation costs
— salary increases and inorganic expense growth from acquisitions;	— inorganic expense growth from acquisitions; and — unfavorable changes in FX translation rates
— higher incentive compensation accruals aligned with actual/projected financial and operating performance. Incentive compensation accruals in 2020 were lower reflecting uncertainties at the time relating to the COVID-19 pandemic; and —unfavorable changes in FX translation rates

MA: Operating Margin 24.5% ⇑ 330 BPS Adjusted Operating Margin 31.8% ⇑ 310 BPS

The operating margin and Adjusted Operating Margin expansion for MA both reflect revenue growth outpacing expense growth.

61

Six months ended June 30, 2021 compared with six months ended June 30, 2020

Executive Summary

–The following table provides an executive summary of key operating results for the six months ended June 30, 2021. Following this executive summary is a more detailed discussion of the Company’s operating results as well as a discussion of the operating results of the Company’s reportable segments.

	Six Months Ended June 30,
Financial measure:	2021			2020			% Change		Insight and Key Drivers of Change Compared to Prior Year
Moody's total revenue	$	3,153		$	2,725		16	%	— reflects strong growth in both segments
MIS External Revenue	$	2,016		$	1,732		16	%	— strong growth mainly driven by leveraged finance issuance as issuers refinanced existing debt and funded M&A activity; — increased CLO and CMBS activity amid favorable market conditions; and — favorable changes in FX translation rates
MA External Revenue	$	1,137		$	993		15	%	— strong growth in KYC and compliance solutions, as well as research and data feeds; — ongoing recurring revenue growth in ERS from subscription-based sales to banking, insurance and asset management customers; — favorable changes in FX translation rates; and — inorganic growth from acquisitions.
Total operating and SG&A expenses	$	1,378		$	1,310		(5	%)	— higher incentive and stock-based compensation aligned with operating performance; and — unfavorable changes in FX translation rates; partially offset by — lower legal accruals; and — cost savings resulting from the COVID-19 crisis and disciplined expense management
Total non-operating (expense) income, net	$	(34)		$	(72)		53	%	— primarily reflects a $40 million benefit related to the reversal of tax-related interest accruals pursuant to the resolution of uncertain tax positions
Operating Margin	52.5		%	47.8		%	470 BPS		— margin expansion reflects strong revenue growth outpacing operating expense growth
Adjusted Operating Margin	56.3		%	51.9		%	440 BPS
ETR	19.0		%	19.0		%	—BPS		— higher benefits of approximately $40 million from the resolution of UTPs in 2021; offset by — lower Excess Tax Benefits in 2021
Diluted EPS	$	6.98		$	5.27		32	%	— increase reflects strong operating income/Adjusted Operating Income growth as described above and includes $0.47/share and $0.11/share in benefits related to the resolution of uncertain tax positions in 2021 and 2020, respectively.
Adjusted Diluted EPS	$	7.28		$	5.55		31	%

62

Moody’s Corporation

	Six Months Ended June 30,						% Change Favorable (Unfavorable)
	2021			2020
Revenue:
United States	$	1,716		$	1,551		11	%
Non-U.S.:
EMEA	959			736			30	%
Asia-Pacific	311			280			11	%
Americas	167			158			6	%
Total Non-U.S.	1,437			1,174			22	%
Total	3,153			2,725			16	%
Expenses:
Operating	758			702			(8	%)
SG&A	620			608			(2	%)
Depreciation and amortization	119			107			(11	%)
Restructuring	2			(3)			(167	%)
Loss pursuant to the divestiture of MAKS	—			9			100	%
Total	1,499			1,423			(5	%)
Operating income	1,654			1,302			27	%
Adjusted Operating Income (1)	1,775			1,415			25	%
Interest expense, net	(56)			(100)			44	%
Other non-operating income, net	22			28			(21	%)
Non-operating (expense) income, net	(34)			(72)			53	%
Net income attributable to Moody’s	$	1,313		$	997		32	%
Diluted weighted average shares outstanding	188.2			189.3			1	%
Diluted EPS attributable to Moody’s common shareholders	$	6.98		$	5.27		32	%
Adjusted Diluted EPS (1)	$	7.28		$	5.55		31	%
Operating margin	52.5		%	47.8		%
Adjusted Operating Margin (1)	56.3		%	51.9		%
Effective tax rate	19.0		%	19.0		%

(1)Adjusted Operating Income, Adjusted Operating Margin and Adjusted Diluted EPS attributable to Moody’s common shareholders are non-GAAP financial measures. Refer to the section entitled “Non-GAAP Financial Measures” of this Management Discussion and Analysis for further information regarding these measures.

63

GLOBAL REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

Global revenue ⇑ $428 million U.S. Revenue ⇑ $165 million Non-U.S. Revenue ⇑ $263 million

The increase in global revenue reflected growth in both reportable segments 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.

–Foreign currency translation favorably impacted global revenue by three percent.

Operating Expense ⇑ $56 million SG&A Expense ⇑ $12 million

-------------------------------------    

Compensation expenses increased $49 million and reflected:	Compensation expenses increased $49 million reflecting:
— higher incentive and stock-based compensation accruals aligned with actual/projected financial and operating performance. Incentive compensation accruals in 2020 were lower reflecting uncertainties at the time relating to the COVID-19 pandemic;	— higher incentive and stock-based compensation accruals aligned with actual/projected financial and operating performance. Incentive compensation accruals in 2020 were lower reflecting uncertainties at the time relating to the COVID-19 pandemic;
— hiring and salary increases;	— hiring and salary increases;
— inorganic growth from acquisitions; and	—inorganic growth from acquisitions; and
— unfavorable changes in FX translation rates	— unfavorable changes in FX translation rates
Non-compensation expenses increased $7 million reflecting:	Non-compensation expenses decreased $37 million reflecting:
— higher costs relating to strategic initiatives to support business growth coupled with enhancements to technology infrastructure to enable automation, innovation and efficiency; partially offset by:	— lower estimates for credit losses primarily reflecting an increase in reserves in 2020 resulting from the anticipated impact of the COVID-19 crisis;
	— lower legal accruals;
— lower travel costs in light of the COVID-19 crisis and continued disciplined cost management.	— lower travel costs in light of the COVID-19 crisis and continued disciplined cost management; partially offset by:
	— higher costs relating to strategic initiatives to support business growth coupled with enhancements to technology infrastructure to enable automation, innovation and efficiency

64

Other Expenses

The 2020 amount includes a $9 million loss pursuant to the divestiture of MAKS relating to customary post-closing completion adjustments pursuant to the sale of the business in the fourth quarter of 2019.

Operating margin 52.5%, up 470 BPS Adjusted Operating Margin 56.3%, up 440 BPS

Operating margin and Adjusted Operating Margin expansion reflects strong revenue growth outpacing growth in total operating expenses.

Interest Expense, net ⇓ $44 million Other non-operating income ⇓ $6 million

Decrease in expense is primarily due to:	Decrease in income is primarily due to:
— a $40 million benefit in 2021 related to the reversal of tax-related interest accruals pursuant to the resolution of uncertain tax positions	— a $13 million benefit in 2020 relating to statute of limitations lapses on certain indemnification obligations relating to the MAKS divestiture;
	— immaterial FX losses in 2021 compared to $5 million in FX gains in 2020;
	— a $7 million loss on the settlement of pension obligations in 2021 resulting from lump sum distributions from the Company's defined benefit pension plans; partially offset by:
	— higher gains in 2021 on certain of the Company's investments in equity securities/investments.

ETR in line with prior year

The 2021 and 2020 ETR include $61 million and $20 million, respectively, in tax benefits relating to the resolution of uncertain tax positions. The aforementioned benefit to the 2021 ETR was diluted by higher income before provision for income taxes compared to the prior year. Additionally, there was an approximate $20 million decrease in Excess Tax Benefits in the first half of 2021 compared to the prior year.

Diluted EPS ⇑ $1.71 Adjusted Diluted EPS ⇑ $1.73

Diluted EPS in the first half of 2021 of $6.98 increased $1.71 compared to the same period in 2020 mainly due to higher operating income. Diluted EPS in 2021 and 2020 include $0.47/share and $0.11/share, respectively, in benefits related to the aforementioned resolution of uncertain tax positions. Adjusted Diluted EPS of $7.28 in the first half of 2021 increased $1.73 compared to the first half of 2020 mainly due to higher Adjusted Operating Income. Adjusted Diluted EPS in 2021 and 2020 include $0.47/share and $0.11/share, respectively, in benefits related to the aforementioned resolution of uncertain tax positions. Refer to the section entitled “Non-GAAP Financial Measures” of this MD&A for items excluded in the derivation of Adjusted Diluted EPS.

65

Segment Results

Moody’s Investors Service

The table below provides a summary of revenue and operating results, followed by further insight and commentary:

	Six Months Ended June 30,						% Change Favorable (Unfavorable)
	2021			2020
Revenue:
Corporate finance (CFG)	$	1,155		$	1,025		13	%
Financial institutions (FIG)	312			267			17	%
Public, project and infrastructure finance (PPIF)	273			242			13	%
Structured finance (SFG)	256			177			45	%
Total ratings revenue	1,996			1,711			17	%
MIS Other	20			21			(5	%)
Total external revenue	2,016			1,732			16	%
Intersegment royalty	82			72			14	%
Total	2,098			1,804			16	%
Expenses:
Operating and SG&A (external)	688			674			(2	%)
Operating and SG&A (intersegment)	4			4			—	%
Depreciation and amortization	36			35			(3	%)
Restructuring	—			(1)			(100	%)
Total expense	728			712			(2	%)
Operating income	$	1,370		$	1,092		25	%
Depreciation and amortization	36			35			(3	%)
Restructuring	—			(1)			(100	%)
Adjusted Operating Income	$	1,406		$	1,126		25	%
Operating margin	65.3		%	60.5		%
Adjusted Operating Margin	67.0		%	62.4		%

66

MOODY'S INVESTORS SERVICE REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

MIS: Global revenue ⇑ $284 million U.S. Revenue ⇑ $110 million Non-U.S. Revenue ⇑ $174 million

–The increase in global MIS revenue reflected strong growth across all ratings LOBs both in the U.S. and internationally.

–Foreign currency translation favorably impacted MIS revenue by three percentage points.

–Transaction revenue grew $248 million compared to the same period in the prior year.

CFG REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

CFG: Global revenue ⇑ $130 million U.S. Revenue ⇑ $32 million Non-U.S. Revenue ⇑ $98 million

Global CFG revenue for the six months ended June 30, 2021 and 2020 was comprised as follows:

(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.

67

The increase in CFG revenue of 13% reflected growth both in the U.S. (4%) and internationally (33%) which resulted in a $119 million increase in transaction revenue.

The most notable drivers of this increase were:

– strong growth in leveraged loan and speculative-grade bond activity in the U.S. and EMEA as issuers refinanced existing debt in light of favorable market conditions and funded M&A activity;

partially offset by:

–lower investment grade rated issuance volumes following very strong issuance volumes in the prior year when issuers were bolstering their balance sheets in light of uncertainties relating to the COVID-19 crisis.

Foreign currency translation favorably impacted CFG revenue by two percentage points.

FIG REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

FIG: Global revenue ⇑ $45 million U.S. Revenue ⇑ $25 million Non-U.S. Revenue ⇑ $20 million

Global FIG revenue for the six months ended June 30, 2021 and 2020 was comprised as follows:

Transaction revenue grew by $33 million compared to the same period in the prior year.

The 17% increase in FIG revenue is mainly due to higher banking revenue in the U.S. and EMEA reflecting both the benefit of favorable changes in product mix and pricing increases coupled with opportunistic issuer activity in light of favorable market conditions.

Foreign currency translation favorably impacted FIG revenue by three percentage points.

68

PPIF REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

PPIF: Global revenue ⇑ $31 million U.S. Revenue ⇑ $2 million Non-U.S. Revenue ⇑ $29 million

Global PPIF revenue for the six months ended June 30, 2021 and 2020 was comprised as follows:

Transaction revenue increased $23 million compared to the same period in the prior year.

The 13% increase in PPIF revenue reflected growth both in the U.S. (1%) and internationally (33%) and was driven by:

–growth in project and infrastructure finance revenue in EMEA mainly reflecting favorable changes in product mix and pricing increases; and

– growth in sovereign issuance reflecting funding to support economic recovery.

Foreign currency translation favorably impacted PPIF revenue by three percentage points.

SFG REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

69

SFG: Global revenue ⇑ $79 million U.S. Revenue ⇑ $50 million Non-U.S. Revenue ⇑ $29 million

Global SFG revenue for the six months ended June 30, 2021 and 2020 was comprised as follows:

The increase in SFG revenue of 45% reflected growth both in the U.S. (47%) and internationally (41%). Transaction revenue increased $73 million compared to the first half of 2020.

The most notable drivers of the growth in SFG revenue were:

–higher CLO refinancing and securitization activity in the U.S. and EMEA, as market conditions remain favorable for this asset class; and

–an increase in U.S. CMBS activity reflecting a narrowing of credit spreads for this asset class compared to a challenging prior year period when securitization activity for retail and hotel properties was adversely impacted by the COVID-19 crisis.

Foreign currency translation favorably impacted SFG revenue by four percentage points.

MIS: Operating and SG&A Expense ⇑ $14 million

    

The growth reflects a $55 million increase in compensation partially offset by a $41 million decline in non-compensation expenses, respectively. The most notable drivers of these changes are as follows:

Compensation costs	Non-compensation costs
The increase is primarily due to:	The decrease is primarily due to:
— higher incentive and stock-based compensation accruals aligned with actual/projected financial and operating performance. Incentive compensation accruals in 2020 were lowered reflecting uncertainties at the time relating to the COVID-19 pandemic; and	— lower legal accruals;
	— lower estimates for credit losses primarily reflecting an increase in reserves in 2020 resulting from the anticipated impact of the COVID-19 crisis; and
— unfavorable changes in FX translation rates	—lower travel costs and disciplined expense management in light of the COVID-19 pandemic

MIS: Operating Margin of 65.3% ⇑ 480 BPS Adjusted Operating Margin of 67.0% ⇑ 460 BPS

MIS operating margin and Adjusted Operating Margin both increased reflecting strong revenue growth outpacing growth in operating and SG&A expenses.

70

Moody’s Analytics

The table below provides a summary of revenue and operating results, followed by further insight and commentary:

	Six Months Ended June 30,						% Change Favorable (Unfavorable)
	2021			2020
Revenue:
Research, data and analytics (RD&A)	$	854		$	724		18	%
Enterprise risk solutions (ERS)	283			269			5	%
Total external revenue	1,137			993			15	%
Intersegment revenue	4			4			—	%
Total MA Revenue	1,141			997			14	%
Expenses:
Operating and SG&A (external)	690			636			(8	%)
Operating and SG&A (intersegment)	82			72			(14	%)
Depreciation and amortization	83			72			(15	%)
Restructuring	2			(2)			(200	%)
Loss pursuant to the divestiture of MAKS	—			9			100	%
Total expense	857			787			(9	%)
Operating income	$	284		$	210		35	%
Depreciation and amortization	83			72			(15	%)
Restructuring	2			(2)			(200	%)
Loss pursuant to the divestiture of MAKS	—			9			100
Adjusted Operating Income	$	369		$	289		28	%
Operating margin	24.9		%	21.1		%
Adjusted Operating Margin	32.3		%	29.0		%

71

MOODY'S ANALYTICS REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

MA: Global revenue ⇑ $144 million U.S. Revenue ⇑ $55 million Non-U.S. Revenue ⇑ $89 million

The 15% increase in global MA revenue reflects growth both in the U.S. and internationally mainly within the RD&A LOB and includes revenue from the acquisitions of RDC, AM, ZMFS, Catylist and Cortera.

–Organic revenue growth was 11%.

–Foreign currency translation favorably impacted MA revenue by five percentage points.

RD&A REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

    

RD&A: Global revenue ⇑ $130 million U.S. Revenue ⇑ $48 million Non-U.S. Revenue ⇑ $82 million

Global RD&A revenue grew 18% compared to the first half of 2020 with the most notable drivers of the increase reflecting:

–strong demand for KYC and compliance solutions reflecting increased customer and supplier risk data usage;

–strong renewals and new sales related to credit research and data feeds; and

–inorganic revenue growth from the acquisitions of RDC, AM, Catylist and Cortera.

Foreign currency translation favorably impacted RD&A revenue by five percentage points.

Organic revenue growth for RD&A was 14%.

72

ERS REVENUE

2021-----------------------------------------------------------------------------------2020

_______________________________________________________________________________________________________

ERS: Global revenue ⇑ $14 million U.S. Revenue ⇑ $7 million Non-U.S. Revenue ⇑ $7 million

Global ERS revenue increased 5% compared to the first half of 2020 with the most notable drivers of the growth reflecting:

–growth in subscription-based revenue, most notably for actuarial modeling tools in support of certain international accounting standards relating to insurance contracts and demand from asset managers for risk management solutions;

–favorable foreign currency translation which impacted revenue by four percentage points; and

–inorganic revenue growth from the acquisition of ZMFS;

partially offset by:

–lower non-recurring software revenue and services due to a de-emphasizing of these lower margin offerings.

Organic revenue growth for ERS was 3%.

MA: Operating and SG&A Expense ⇑ $54 million

The increase in operating and SG&A expenses compared to the first six months of 2020 is primarily due to growth in both compensation non-compensation costs of $42 million and $12 million, respectively, reflecting:

Compensation costs	Non-compensation costs
— higher costs reflecting salary increases and inorganic expense growth from acquisitions;	— higher costs relating to strategic initiatives to support business growth coupled with enhancements to technology infrastructure to enable automation, innovation and efficiency; partially offset by:
— higher incentive compensation accruals aligned with actual/projected financial and operating performance. Incentive compensation accruals in 2020 were lowered reflecting uncertainties at the time relating to the COVID-19 pandemic; and
	— lower estimates for credit losses primarily reflecting an increase in reserves in 2020 resulting from the anticipated impact of the COVID-19 crisis; and
— unfavorable changes in FX translation rates	— lower travel costs in light of the COVID-19 crisis and continued disciplined expense management

73

Other Expenses

The first half of 2020 includes a $9 million loss pursuant to the divestiture of MAKS and related to a customary post-closing completion adjustment pursuant to the sale of the business in the fourth quarter of 2019.

MA: Operating Margin 24.9% ⇑ 380BPS Adjusted Operating Margin 32.3% ⇑ 330BPS

The operating margin and Adjusted Operating Margin expansion for MA both reflect revenue growth outpacing expense growth.

Liquidity and Capital Resources

Cash Flow

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

The following is a summary of the changes in the Company’s cash flows followed by a brief discussion of these changes:

	Six Months Ended June 30,				$ Change Favorable (Unfavorable)
	2021		2020
Net cash provided by operating activities	$	1,270	$	977	$	293
Net cash used in investing activities	$	(251)	$	(823)	$	572
Net cash (used in) provided by financing activities	$	(792)	$	123	$	(915)
Free Cash Flow (1)	$	1,226	$	915	$	311

(1) Free Cash Flow is a non-GAAP measure and is defined by the Company as net cash provided by operating activities minus cash paid for capital expenditures. Refer to “Non-GAAP Financial Measures” of this MD&A for further information on this financial measure.

Net cash provided by operating activities

Net cash flows from operating activities in the six months ended June 30, 2021 increased $293 million compared to same period in 2020 with the most significant drivers reflecting:

–an increase in net income compared to the same period in the prior year (see section entitled “Results of Operations” for further discussion);

–a $99 million contribution to the Company's funded pension plan in 2020 that did not recur in 2021; and

–a $68 million payment made in 2020 in conjunction with the settlement of treasury lock interest rate forward contracts

partially offset by:

–higher cash paid for income taxes of approximately $215 million resulting from both the Company's strong earnings growth in 2021 and from the extension of payment terms to the third quarter of 2020 for approximately $115 million in estimated federal tax payments as a result of relief provided by the IRS in response to the COVID-19 crisis.

Net cash used in investing activities

The $572 million decrease in cash used in investing activities in the six months ended June 30, 2021 compared to the same period in 2020 primarily reflects lower cash paid for acquisitions of $560 million (refer to Note 8 to the condensed consolidated financial statements for further discussion on the Company's M&A activity).

Net cash (used in) provided by financing activities

The $915 million increase in cash used in financing activities in the six months ended June 30, 2021 compared to the same period in the prior year was primarily attributed to:

–the net issuance of approximately $700 million in long-term debt in 2020; and

–higher cash paid for treasury share repurchases of $250 million compared to the first half of 2020.

74

Cash and short-term investments held in non-U.S. jurisdictions

The Company’s aggregate cash and cash equivalents and short-term investments of $2.9 billion at June 30, 2021 consisted of approximately $1.9 billion located outside of the U.S. Approximately 17% of the Company’s aggregate cash and cash equivalents and short-term investments is denominated in euros and British pounds. 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 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.

Other Material Future Cash Requirements

The Company believes that it has the financial resources needed to meet its cash requirements and expects to have positive operating cash flow for the next twelve months. 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.

Moody's remains committed to using its strong cash flow to create value for shareholders by both investing in the Company's employees and growing the business through targeted organic initiatives and inorganic acquisitions aligned with strategic priorities. Additional excess capital is returned to the Company’s shareholders via a combination of dividends and share repurchases.

Dividends and share repurchases

On July 27, 2021, the Board of Directors of the Company declared a quarterly dividend of $0.62 per share of Moody’s common stock, payable September 10, 2021 to shareholders of record at the close of business on August 20, 2021. The continued payment of dividends at this rate, or at all, is subject to the discretion of the Board.

On December 16, 2019, the Board approved $1 billion share repurchase authority and on February 9, 2021, the Board approved an additional $1 billion in share repurchase authority. At June 30, 2021, there was a total remaining authority of approximately $1.3 billion under these authorizations. Future share repurchase activity is subject to available cash, market conditions and other ongoing capital allocation decisions.

Other cash requirements

The Company has future cash requirements, including operating leases and debt service and payments as noted in the tables that follow as well as future payments related to the transition tax under the Tax Act.

Indebtedness

At June 30, 2021, Moody’s had $6.4 billion of outstanding debt and approximately $1 billion of additional capacity available under the Company’s CP program, which is backstopped by the 2018 Facility. At June 30, 2021, the Company was in compliance with all covenants contained within all of the debt agreements. All of the Company’s long-term 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. At June 30, 2021, there were no such cross defaults.

75

The repayment schedule for the Company’s borrowings outstanding at June 30, 2021 is as follows:

For additional information on the Company's outstanding debt, refer to Note 16 to the condensed 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 result in higher financing costs.

Off-Balance Sheet Arrangements

At June 30, 2021, Moody’s did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as special purpose or variable interest entities where Moody’s is the primary beneficiary, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, Moody’s is not exposed to any financing, liquidity market or credit risk that could arise if it had engaged in such relationships.

Contractual Obligations

The following table presents payments due under the Company’s contractual obligations as of June 30, 2021:

Payments Due by Period

	Payments Due by Period
(in millions)	Total		Less Than 1 Year		1 - 3 Years		3 - 5 Years		Over 5 Years
Indebtedness (1)	$	9,002	$	194	$	1,860	$	962	$	5,986
Operating lease obligations	528		107		186		152		83
Purchase obligations	238		121		110		7		—
Pension obligations (2)	107		4		22		21		60
Total (3)	$	9,875	$	426	$	2,178	$	1,142	$	6,129

(1)Reflects principal payments, related interest and applicable fees due on all indebtedness outstanding as described in Note 16 to the condensed consolidated financial statements.

(2)Reflects projected benefit payments relating to the Company’s U.S. unfunded DBPPs and Retirement and Other Plans described in Note 15 to the condensed consolidated financial statements.

(3)The table above does not include the Company's long-term tax liabilities of $406 million relating 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 resulting 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.

76

Non-GAAP Financial Measures:

In addition to its reported results, Moody’s has included in this MD&A certain adjusted results that the SEC defines as “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:

Adjusted Operating Income and Adjusted Operating Margin:

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 operating performance of Moody’s. Adjusted Operating Income excludes the impact of: i) depreciation and amortization; ii) restructuring charges/adjustments; and iii) a loss pursuant to the divestiture of MAKS. Depreciation and amortization are excluded because companies utilize productive assets of different ages and use different methods of acquiring and depreciating productive assets. Restructuring charges are excluded as the frequency and magnitude of these charges may vary widely across periods and companies. 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.

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.

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Operating income	$	801		$	710		$	1,654		$	1,302
Adjustments:
Depreciation and amortization	60			58			119			107
Restructuring	—			(2)			2			(3)
Loss pursuant to the divestiture of MAKS	—			—			—			9
Adjusted Operating Income	$	861		$	766		$	1,775		$	1,415
Operating margin	51.6		%	49.5		%	52.5		%	47.8		%
Adjusted Operating Margin	55.4		%	53.4		%	56.3		%	51.9		%

Adjusted Net Income and Adjusted Diluted EPS attributable to Moody's common shareholders:

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 operating performance of Moody’s. Adjusted Net Income and Adjusted Diluted EPS exclude the impact of: i) amortization of acquired intangible assets; ii) restructuring charges/adjustments; and iii) loss pursuant to the divestiture of MAKS.

The Company excludes the impact of amortization of acquired intangible assets as companies utilize intangible assets with different ages 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 are excluded as the frequency and magnitude of these charges may vary widely across periods and companies. 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 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.

77

Below is a reconciliation of this measure to its most directly comparable U.S. GAAP amount:

	Three Months Ended June 30,								Six Months Ended June 30,
Amounts in millions	2021				2020				2021				2020
Net income attributable to Moody's common shareholders			$	577			$	509			$	1,313			$	997
Pre-Tax Acquisition-Related Intangible Amortization Expenses	$	36			$	31			$	71			$	59
Tax on Acquisition-Related Intangible Amortization Expenses	(8)				(7)				(16)				(13)
Net Acquisition-Related Intangible Amortization Expenses			28				24				55				46
Pre-Tax Restructuring	$	—			$	(2)			$	2			$	(3)
Tax on Restructuring	—				1				—				1
Net Restructuring			—				(1)				2				(2)
Loss pursuant to the divestiture of MAKS			—				—				—				9
Adjusted Net Income			$	605			$	532			$	1,370			$	1,050

	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020
Diluted earnings per share attributable to Moody's common shareholders			$	3.07			$	2.69			$	6.98			$	5.27
Pre-Tax Acquisition-Related Intangible Amortization Expenses	$	0.19			$	0.16			$	0.38			$	0.31
Tax on Acquisition-Related Intangible Amortization Expenses	(0.04)				(0.03)				(0.09)				(0.07)
Net Acquisition-Related Intangible Amortization Expenses			0.15				0.13				0.29				0.24
Pre-Tax Restructuring	$	—			$	(0.01)			$	0.01			$	(0.02)
Tax on Restructuring	—				—				—				0.01
Net Restructuring			—				(0.01)				0.01				(0.01)
Loss pursuant to the divestiture of MAKS			—				—				—				0.05
Adjusted Diluted EPS			$	3.22			$	2.81			$	7.28			$	5.55

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

Free Cash Flow:

The Company defines Free Cash Flow as net cash provided by operating activities minus payments for capital additions. Management believes that Free Cash Flow is a useful metric in assessing the Company’s cash flows to service debt, pay dividends and to fund acquisitions and share repurchases. Management deems capital expenditures essential to the Company’s product and service innovations and maintenance of Moody’s operational capabilities. Accordingly, capital expenditures are deemed to be a recurring use of Moody’s cash flow. Below is a reconciliation of the Company’s net cash flows from operating activities to Free Cash Flow:

	Six Months Ended June 30,
	2021		2020
Net cash flows provided by operating activities	$	1,270	$	977
Capital additions	(44)		(62)
Free Cash Flow	$	1,226	$	915
Net cash flows used in investing activities	$	(251)	$	(823)
Net cash flows (used in) provided by financing activities	$	(792)	$	123

78

Organic Revenue:

The Company presents the organic revenue and growth because management deems this metric to be a useful measure which provides additional perspective in assessing the revenue growth excluding the inorganic revenue impacts from certain acquisition activity. The following table details the periods excluded from each acquisition to determine organic revenue.

		Period excluded to determine organic revenue growth
Acquisition	Acquisition Date	Q2	YTD
Regulatory DataCorp	February 13, 2020	-	January 1, 2021 - February 12, 2021
Acquire Media	October 21, 2020	April 1, 2021 - June 30, 2021	January 1, 2021 - June 30, 2021
ZM Financial Systems	December 7, 2020	April 1, 2021 - June 30, 2021	January 1, 2021 - June 30, 2021
Catylist	December 30, 2020	April 1, 2021 - June 30, 2021	January 1, 2021 - June 30, 2021
Cortera	March 19, 2021	April 1, 2021 - June 30, 2021	March 19, 2021 - June 30, 2021

Below is a reconciliation of MA's reported revenue and growth rates to its organic revenue and organic growth rates:

	Three Months Ended June 30,							Six Months Ended June 30,
Amounts in millions	2021		2020		Change		Growth	2021		2020		Change		Growth
MA revenue	$	573	$	497	$	76	15%	$	1,137	$	993	$	144	15%
Regulatory DataCorp	—		—		—			(8)		—		(8)
Acquire Media	(5)		—		(5)			(12)		—		(12)
ZM Financial Systems	(3)		—		(3)			(5)		—		(5)
Catylist	(2)		—		(2)			(4)		—		(4)
Cortera	(3)		—		(3)			(3)		—		(3)
Organic MA revenue	$	560	$	497	$	63	13%	$	1,105	$	993	$	112	11%
	Three Months Ended June 30,							Six Months Ended June 30,
Amounts in millions	2021		2020		Change		Growth	2021		2020		Change		Growth
RD&A revenue	$	435	$	366	$	69	19%	$	854	$	724	$	130	18%
Regulatory DataCorp	—		—		—			(8)		—		(8)
Acquire Media	(5)		—		(5)			(12)		—		(12)
Catylist	(2)		—		(2)			(4)		—		(4)
Cortera	(3)		—		(3)			(3)		—		(3)
Organic RD&A revenue	$	425	$	366	$	59	16%	$	827	$	724	$	103	14%
	Three Months Ended June 30,							Six Months Ended June 30,
Amounts in millions	2021		2020		Change		Growth	2021		2020		Change		Growth
ERS revenue	$	138	$	131	$	7	5%	$	283	$	269	$	14	5%
ZM Financial Systems	(3)		—		(3)			(5)		—		(5)
Organic ERS revenue	$	135	$	131	$	4	3%	$	278	$	269	$	9	3%

79

Recently Issued Accounting Standards

Refer to Note 1 to the condensed consolidated financial statements located in Part I of this Form 10-Q for a discussion on the impact to the Company relating to recently issued accounting pronouncements.

Contingencies

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 Item 1 - "Financial Statements", Note 18 "Contingencies” in this Form 10-Q.

Regulation

MIS, certain of the Company's credit rating affiliates and many of the issuers and/or securities that 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). In addition, some of the services offered by MA and its affiliates are subject to regulation in 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 pass through certain regulatory requirements to key suppliers such as MA. 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 the Company’s products and services, in the manner in which the Company’s products and services are utilized and in the manner in which the Company operates.

The regulatory landscape continues to evolve. In the U.S., CRAs are subject to extensive regulation primarily pursuant to the Reform Act and the Dodd-Frank Act. The Reform Act added Section 15E to the Exchange Act and provided the SEC with the authority to establish a registration and oversight program for CRAs registered as NRSROs. The Dodd-Frank Act added additional provisions to Section 15E. The transitions of the Presidential administration, Congress and SEC, in the U.S., as with any such government transition, could bring potential changes in the laws affecting CRAs and/or the enforcement of any new or existing legislation, regulation or directives by government authorities.

In the EU, the CRA industry is registered and supervised through a pan-EU regulatory framework. ESMA has direct supervisory responsibility for registered CRAs throughout the EU. MIS’ EU CRA subsidiaries are registered and are subject to formal regulation and periodic inspection. From time to time, ESMA publishes interpretive guidance, or thematic reports regarding various aspects of the CRA regulation and, annually, sets out its work program for the forthcoming year. In July 2021, the Commission announced further measures in respect of its sustainable finance strategy. These include further assessments in respect of both CRAs and sustainability ratings and research, which might lead to legislative action.

On December 31, 2020, the MIS U.K. registered CRA ceased to be registered with and regulated by ESMA and became subject to regulation by the U.K. Financial Conduct Authority. Regulatory arrangements also came into effect in both the U.K. and the EU to allow credit ratings to be available for regulatory use in both the EU and the U.K. 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.

In light of the regulations that have gone into effect in both the EU and the U.S. (as well as many other countries), periodically and as a matter of course pursuant to their enabling legislation, regulatory authorities have, and will continue to, publish reports that describe their oversight activities. In addition, other legislation, regulation and/or interpretation of existing regulation relating to the Company’s operations, including credit rating, ancillary and research services has been or is being considered by local, national and multinational bodies and this type of activity is likely to continue in the future. Finally, in certain countries, governments may provide financial or other support to locally-based CRAs. If enacted, any such legislation and regulation could change the competitive landscape in which the Company operates. The legal status of CRAs has been addressed by courts in various decisions and is likely to be considered and addressed in legal proceedings from time to time in the future. Management of the Company cannot predict whether these or any other proposals will be enacted, the outcome of any pending or possible future legal proceedings, or regulatory or legislative actions, or the ultimate impact of any such matters on the competitive position, financial position or results of operations of the Company.

80

Forward-Looking Statements

Certain statements contained in this quarterly report on Form 10-Q are forward-looking statements and are based on future expectations, plans and prospects for the business and operations of the Company that involve a number of risks and uncertainties. Such statements involve estimates, projections, goals, forecasts, assumptions and uncertainties that could cause actual results or outcomes to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements. Those statements appear at various places throughout this quarterly report on Form 10-Q, including in the sections entitled “Contingencies” under Item 2, “MD&A”, commencing on page 47 of this quarterly report on Form 10-Q, under “Legal Proceedings” in Part II, Item 1, of this Form 10-Q, and elsewhere in the context of statements containing the words “believe”, “expect”, “anticipate”, “intend”, “plan”, “will”, “predict”, “potential”, “continue”, “strategy”, “aspire”, “target”, “forecast”, “project”, “estimate”, “should”, “could”, “may” and similar expressions or words and variations thereof relating to the Company’s views on future events, trends and contingencies or otherwise convey the prospective nature of events or outcomes generally indicative of forward-looking statements. Stockholders and investors are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements and other information are made as of the date of this quarterly report on Form 10-Q, and the Company undertakes no obligation (nor does it intend) to publicly supplement, update or revise such statements on a going-forward basis, whether as a result of subsequent developments, changed expectations or otherwise, except as required by applicable law or regulation. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company is identifying examples of factors, risks and uncertainties that could cause actual results to differ, perhaps materially, from those indicated by these forward-looking statements.

Those factors, risks and uncertainties include, but are not limited to the impact of COVID-19 on volatility in the U.S. and world financial markets, on general economic conditions and GDP in the U.S. and worldwide, and on the Company’s own operations and personnel. Many other factors could cause actual results to differ from Moody’s outlook, including:

•credit market disruptions or economic slowdowns, which could affect the volume of debt and other securities issued in domestic and/or global capital markets;

•other matters that could affect the volume of debt and other securities issued in domestic and/or global capital markets, including regulation, credit quality concerns, changes in interest rates and other volatility in the financial markets such as that due to Brexit and uncertainty as companies transition away from LIBOR;

•the level of merger and acquisition activity in the U.S. and abroad;

•the uncertain effectiveness and possible collateral consequences of U.S. and foreign government actions affecting credit markets, international trade and economic policy, including those related to tariffs, tax agreements and trade barriers;

•concerns in the marketplace affecting our credibility or otherwise affecting market perceptions of the integrity or utility of independent credit agency ratings;

•the introduction of competing products or technologies by other companies;

•pricing pressure from competitors and/or customers;

•the level of success of new product development and global expansion;

•the impact of regulation as an NRSRO, the potential for new U.S., state and local legislation and regulations;

•the potential for increased competition and regulation in the EU and other foreign jurisdictions;

•exposure to litigation related to Moody's Investors Service's rating opinions, as well as any other litigation, government and regulatory proceedings, investigations and inquiries to which the Company may be subject from time to time;

•U.S. legislation modifying the pleading standards and EU regulations modifying the liability standards applicable to credit rating agencies in a manner adverse to credit rating agencies;

•provisions of EU regulations imposing additional procedural and substantive requirements on the pricing of services and the expansion of supervisory remit to include non-EU ratings used for regulatory purposes;

•the possible loss of key employees; failures or malfunctions of our operations and infrastructure;

•any vulnerabilities to cyber threats or other cybersecurity concerns;

•the outcome of any review by controlling tax authorities of the Company’s global tax planning initiatives;

•exposure to potential criminal sanctions or civil remedies if the Company fails to comply with foreign and U.S. laws and regulations that are applicable in the jurisdictions in which the Company operates, including data protection and privacy laws, sanctions laws, anti-corruption laws, and local laws prohibiting corrupt payments to government officials;

•the impact of mergers, acquisitions or other business combinations and the ability of the Company to successfully integrate such acquired businesses;

•currency and foreign exchange volatility;

•the level of future cash flows;

81

•the levels of capital investments; and

•a decline in the demand for credit risk management tools by financial institutions.

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 annual report on Form 10-K for the year ended December 31, 2020 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.

82

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes to the Company's market risk during the six months ended June 30, 2021. For a discussion of the Company’s exposure to market risk, refer to the Company’s market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of the 2020 Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures: 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 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 Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, including the Company’s Chief Executive Officer and 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-month period ended June 30, 2021. Although a significant portion of the Company’s workforce has been working remotely due to the COVID-19 pandemic, Moody’s has not experienced any material impact to its internal controls over financial reporting.

83

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding legal proceedings, see Item 1 – “Financial Statements – Notes to Condensed Consolidated Financial Statements (Unaudited),” Note 18 “Contingencies” in this Form 10-Q.

Item 1A. Risk Factors

There have been no material changes from the significant risk factors and uncertainties previously disclosed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the year ended December 31, 2020, that if they were to occur, could materially adversely affect the Company’s business, financial condition, operating results and/or cash flow. For a discussion of the Company’s risk factors, refer to Item 1A. “Risk Factors”, contained in the Company’s annual report on Form 10-K for the year ended December 31, 2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

MOODY'S PURCHASES OF EQUITY SECURITIES

For the three months ended June 30, 2021

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)
April 1- 30	402,163	$	315.99	$	399,925	$	1,572	million
May 1- 31	372,995	$	329.18	$	372,329	$	1,449	million
June 1- 30	364,564	$	344.93	$	353,244	$	1,327	million
Total	1,139,722	$	329.44	$	1,125,498

(1)Includes surrender to the Company of 2,238, 666 and 11,320 shares of common stock in April, May and June, respectively, to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees.

(2)As of the last day of each of the months. On December 16, 2019, the Board authorized $1 billion in share repurchase authority and on February 9, 2021, the Board approved an additional $1 billion in share repurchase authority. At June 30, 2021 there was approximately $1,327 million of combined share repurchase authority remaining. There is no established expiration date for the remaining authorization.

During the second quarter of 2021, Moody’s issued a net 0.2 million shares under employee stock-based compensation plans.

Item 5. Other Information

Not applicable.

84

Item 6.    Exhibits

Exhibit No	Description
3	ARTICLES OF INCORPORATION AND BY-LAWS
.1	Restated Certificate of Incorporation of the Registrant, effective April 22, 2020 (incorporated by reference to Exhibit 3.3 to the Report on Form 8-K of the Registrant, file number 1-14037, filed April 27, 2020)
.2	Amended and Restated By-laws of Moody’s Corporation, effective April 22, 2020 (incorporated by reference to Exhibit 3.2 to the Report on Form 8-K of the Registrant, file number 1-14037, filed April 27, 2020)
31	CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
.1*	Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
.2*	Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
.1*	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. The Company has furnished this certification and does not intend for it to be considered filed under the Securities Exchange Act of 1934 or incorporated by reference into future filings under the Securities Act of 1933 or the Securities Exchange Act of 1934.
.2*	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. The Company has furnished this certification and does not intend for it to be considered filed under the Securities Exchange Act of 1934 or incorporated by reference into future filings under the Securities Act of 1933 or the Securities Exchange Act of 1934.
101.INS*	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Definitions Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
* Filed herewith

85

SIGNATURES

Pursuant to the requirements 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.

		MOODY’S CORPORATION
	By:	/ S / MARK KAYE
		Mark Kaye
		Executive Vice President and Chief Financial Officer
		(principal financial officer)
	By:	/ S / CAROLINE SULLIVAN
		Caroline Sullivan
		Senior Vice President and Corporate Controller
		(principal accounting officer)
Date: July 29, 2021

86

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Robert Fauber, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Moody’s Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/ S / ROBERT FAUBER

Robert Fauber

President and Chief Executive Officer

July 29, 2021

EX-31.2

 Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Mark Kaye, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Moody’s Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/ S / MARK KAYE

Mark Kaye

Executive Vice President and Chief Financial Officer

July 29, 2021

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Moody’s Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert Fauber, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/ S /  ROBERT FAUBER

Robert Fauber

President and Chief Executive Officer

July 29, 2021

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Moody’s Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark Kaye, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/ S / MARK KAYE

Mark Kaye

Executive Vice President and Chief Financial Officer

July 29, 2021

XML

Cover Page shares in Millions	6 Months Ended
	Jun. 30, 2021 shares
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
Document Transition Report	false
Entity File Number	1-14037
Entity Registrant Name	Moody’s Corporation
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-3998945
Entity Address, Address Line One	7 World Trade Center at 250 Greenwich Street
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10007
City Area Code	(212)
Local Phone Number	553-0300
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)	186.2
Entity Central Index Key	0001059556
Document Fiscal Period Focus	Q2
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Common Stock, par value $0.01 per share
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	MCO
Security Exchange Name	NYSE
1.75% Senior Notes Due 2027
Entity Information [Line Items]
Title of 12(b) Security	1.75% Senior Notes Due 2027
Trading Symbol	MCO 27
Security Exchange Name	NYSE
0.950% Senior Notes Due 2030
Entity Information [Line Items]
Title of 12(b) Security	0.950% Senior Notes Due 2030
Trading Symbol	MCO 30
Security Exchange Name	NYSE

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Statement [Abstract]
Revenue	$ 1,553	$ 1,435	$ 3,153	$ 2,725
Expenses
Operating	365	362	758	702
Selling, general and administrative	327	307	620	608
Depreciation and amortization	60	58	119	107
Restructuring	0	(2)	2	(3)
Loss pursuant to the divestiture of MAKS	0	0	0	9
Total expenses	752	725	1,499	1,423
Operating income	801	710	1,654	1,302
Non-operating (expense) income, net
Interest expense, net	(49)	(60)	(56)	(100)
Other non-operating income, net	6	16	22	28
Total non-operating (expense) income, net	(43)	(44)	(34)	(72)
Income before provision for income taxes	758	666	1,620	1,230
Provision for income taxes	181	157	307	234
Net income	577	509	1,313	996
Less: Net income (loss) attributable to noncontrolling interests	0	0	0	(1)
Net income attributable to Moody's	$ 577	$ 509	$ 1,313	$ 997
Earnings per share attributable to Moody's common shareholders
Basic (in usd per share)	$ 3.09	$ 2.71	$ 7.02	$ 5.31
Diluted (in usd per share)	$ 3.07	$ 2.69	$ 6.98	$ 5.27
Weighted average number of shares outstanding
Basic (in shares)	186.7	187.7	187.0	187.6
Diluted (in shares)	187.9	189.0	188.2	189.3

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Statement of Comprehensive Income [Abstract]
Net Income	$ 577	$ 509	$ 1,313	$ 996
Other Comprehensive Income (Loss):
Foreign currency translation adjustment - Pre Tax	37	78	(110)	(97)
Foreign currency translation adjustments - Tax	(2)	1	4	6
Foreign currency translation adjustments - Net of Tax	35	79	(106)	(91)
Net gains (losses) on net investment hedges - Pre Tax	(41)	(97)	134	22
Net gains (losses) on net investment hedges, Tax	12	24	(30)	(6)
Net gains (losses) on net investment hedges, Net of Tax	(29)	(73)	104	16
Net investment hedges - reclassification of gains included in net income - Pre Tax	(1)	0	(2)	0
Net investment hedges - reclassification of gains included in net income - Tax	1	0	1	0
Net investment hedges - reclassification of gains included in net income - Net of Tax	0	0	(1)	0
Cash Flow Hedges:
Net realized and unrealized (losses) gains on cash flow hedges - Pre Tax	0	(20)	0	(68)
Net realized and unrealized (losses) gains on cash flow hedges - Tax	0	6	0	18
Net realized and unrealized (losses) gains on cash flow hedges - Net of Tax	0	(14)	0	(50)
Reclassification of losses (gains) included in net income - Pre Tax			1	1
Reclassification of losses (gains) included in net income - Tax			0	0
Reclassification of losses (gains) included in net income - Net of Tax			1	1
Pension and Other Retirement Benefits:
Amortization of actuarial losses and prior service costs included in net income - Pre Tax	10	1	13	3
Amortization of actuarial losses and prior service costs included in net income - Tax	(2)	0	(3)	(1)
Amortization of actuarial losses and prior service costs included in net income - Net of Tax	8	1	10	2
Net actuarial (losses) gains and prior service costs - Pre Tax	0	9	0	8
Net actuarial (losses) gains and prior service costs - Tax	0	(2)	0	(2)
Net actuarial (losses) gains and prior service costs - Net of Tax	0	7	0	6
Total other comprehensive income (loss) - Pre Tax	5	(29)	36	(131)
Total other comprehensive income (loss) - Tax	9	29	(28)	15
Total other comprehensive income (loss) - Net of Tax	14	0	8	(116)
Comprehensive income	591	509	1,321	880
Less: comprehensive income (loss) attributable to noncontrolling interests	(1)	(11)	1	(13)
Comprehensive Income Attributable to Moody's	$ 592	$ 520	$ 1,320	$ 893

XML

CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 2,809	$ 2,597
Short-term investments	88	99
Accounts receivable, net of allowance for credit losses of $32 in 2021 and $34 in 2020	1,458	1,430
Other current assets	379	383
Total current assets	4,734	4,509
Property and equipment, net of accumulated depreciation of $969 in 2021 and $928 in 2020	282	278
Operating lease right-of-use assets	357	393
Goodwill	4,590	4,556
Intangible assets, net	1,784	1,824
Deferred tax assets, net	249	334
Other assets	556	515
Total assets	12,552	12,409
Current liabilities:
Accounts payable and accrued liabilities	816	1,039
Current portion of operating lease liabilities	92	94
Deferred revenue	1,142	1,089
Total current liabilities	2,050	2,222
Non-current portion of deferred revenue	93	98
Long-term debt	6,355	6,422
Deferred tax liabilities, net	422	404
Uncertain tax positions	406	483
Operating lease liabilities	386	427
Other liabilities	460	590
Total liabilities	10,172	10,646
Contingencies
Shareholders' equity:
Preferred stock, par value $0.01 per share; 10,000,000 shares authorized; no shares issued and outstanding	0	0
Common stock	3	3
Capital surplus	784	735
Retained earnings	12,094	11,011
Treasury stock, at cost; 156,723,618 and 155,808,563 shares of common stock at June 30, 2021 and December 31, 2020	(10,270)	(9,748)
Accumulated other comprehensive loss	(425)	(432)
Total Moody's shareholders' equity	2,186	1,569
Noncontrolling interests	194	194
Total shareholders' equity	2,380	1,763
Total liabilities, noncontrolling interests and shareholders' equity	12,552	12,409
Series Common Stock
Shareholders' equity:
Common stock	$ 0	$ 0

XML

CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Accounts receivable, allowances	$ 32	$ 34
Accumulated depreciation, property and equipment	$ 969	$ 928
Preferred stock, par value (in usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, shares issued (in shares)	342,902,272	342,902,272
Treasury stock, shares (in shares)	156,723,618	155,808,563
Series Common Stock
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	10,000,000	10,000,000
Common stock, shares issued (in shares)	0	0
Common stock, shares outstanding (in shares)	0	0

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash flows from operating activities
Net Income	$ 1,313	$ 996
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	119	107
Stock-based compensation	86	72
Deferred income taxes	59	46
Loss pursuant to the divestiture of MAKS	0	9
Settlement of treasury rate lock	0	(68)
Changes in assets and liabilities:
Accounts receivable	(29)	11
Other current assets	17	(45)
Other assets	(23)	(39)
Accounts payable and accrued liabilities	(182)	31
Deferred revenue	49	(60)
Unrecognized tax benefits and other non-current tax liabilities	(75)	(13)
Other liabilities	(64)	(70)
Net cash provided by operating activities	1,270	977
Cash flows from investing activities
Capital additions	(44)	(62)
Purchases of investments	(109)	(108)
Sales and maturities of investments	85	45
Cash paid for acquisitions, net of cash acquired	(138)	(698)
Receipts from settlements of net investment hedges	2	0
Payments for settlements of net investment hedges	(47)	0
Net cash used in investing activities	(251)	(823)
Cash flows from financing activities
Issuance of notes	0	995
Repayment of notes	0	(300)
Issuance of commercial paper	0	789
Repayment of commercial paper	0	(792)
Proceeds from stock-based compensation plans	23	29
Repurchase of shares related to stock-based compensation	(79)	(100)
Treasury shares	(503)	(253)
Dividends	(232)	(210)
Debt issuance costs, extinguishment costs and related fees	0	(17)
Dividends to noncontrolling interest	(1)	(1)
Payment to acquire noncontrolling interests	0	(17)
Net cash (used in) provided by financing activities	(792)	123
Effect of exchange rate changes on cash and cash equivalents	(15)	(10)
Increase in cash and cash equivalents	212	267
Cash and cash equivalents, beginning of period	2,597	1,832
Cash and cash equivalents, end of period	$ 2,809	$ 2,099

XML

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) shares in Millions, $ in Millions	Total	Total Moody's Shareholders' Equity	Common Stock	Capital Surplus	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Loss	Non- Controlling Interests	Cumulative Effect, Period of Adoption, Adjustment	Cumulative Effect, Period of Adoption, Adjustment Total Moody's Shareholders' Equity	Cumulative Effect, Period of Adoption, Adjustment Retained Earnings	Cumulative Effect, Period of Adoption, Adjustment Accumulated Other Comprehensive Loss
Beginning Balance (in shares) at Dec. 31, 2019			342.9			155.2
Beginning Balance at Dec. 31, 2019	$ 831	$ 612	$ 3	$ 642	$ 9,656	$ (9,250)	$ (439)	$ 219	$ (2)	$ (2)	$ (2)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income/ (loss)	997	997			997
Dividends	(209)	(209)			(209)
Stock-based compensation	72	72		72
Shares issued for stock-based compensation plans at average cost, net (in shares)						1.1
Shares issued for stock-based compensation plans at average cost, net	(71)	(71)		(61)		$ (10)
Purchase of noncontrolling interest	(17)	(2)		(2)				(15)
Treasury shares repurchased (in shares)						(1.1)
Treasury shares repurchased	(253)	(253)		0		$ (253)
Currency translation adjustment, net of net investment hedge activity (net of tax)	(75)	(62)					(62)	(13)
Net actuarial gains and prior service cost (net of tax)	6	6					6
Amortization of prior service costs/actuarial losses and settlement charge	2	2					2
Net realized and unrealized gain (loss) on cash flow hedges (net of tax)	(49)	(49)					(49)
Ending Balance (in shares) at Jun. 30, 2020			342.9			155.2
Ending Balance at Jun. 30, 2020	1,232	1,041	$ 3	651	10,442	$ (9,513)	(542)	191
Beginning Balance (in shares) at Mar. 31, 2020			342.9			155.4
Beginning Balance at Mar. 31, 2020	799	582	$ 3	616	10,041	$ (9,524)	(554)	217
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	510	509			509			1
Net income/ (loss)	509
Dividends	(108)	(108)			(108)			0
Stock-based compensation	35	35		35
Shares issued for stock-based compensation plans at average cost, net (in shares)						0.2
Shares issued for stock-based compensation plans at average cost, net	13	13		2		$ 11
Purchase of noncontrolling interest	(17)	(2)		(2)				(15)
Currency translation adjustment, net of net investment hedge activity (net of tax)	6	18					18	(12)
Net actuarial gains and prior service cost (net of tax)	7	7					7
Amortization of prior service costs/actuarial losses and settlement charge	1	1					1
Net realized and unrealized gain (loss) on cash flow hedges (net of tax)	(14)	(14)					(14)
Ending Balance (in shares) at Jun. 30, 2020			342.9			155.2
Ending Balance at Jun. 30, 2020	1,232	1,041	$ 3	651	10,442	$ (9,513)	(542)	191
Beginning Balance (in shares) at Dec. 31, 2020			342.9			155.8
Beginning Balance at Dec. 31, 2020	1,763	1,569	$ 3	735	11,011	$ (9,748)	(432)	194
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income/ (loss)	1,313	1,313			1,313
Dividends	(231)	(230)			(230)			(1)
Stock-based compensation	86	86		86
Shares issued for stock-based compensation plans at average cost, net (in shares)						0.7
Shares issued for stock-based compensation plans at average cost, net	(56)	(56)		(37)		$ (19)
Treasury shares repurchased (in shares)						(1.6)
Treasury shares repurchased	(503)	(503)				$ (503)
Currency translation adjustment, net of net investment hedge activity (net of tax)	(3)	(4)					(4)	1
Net actuarial gains and prior service cost (net of tax)	0
Amortization of prior service costs/actuarial losses and settlement charge	10	10					10
Net realized and unrealized gain (loss) on cash flow hedges (net of tax)	1	1					1
Ending Balance (in shares) at Jun. 30, 2021			342.9			156.7
Ending Balance at Jun. 30, 2021	2,380	2,186	$ 3	784	12,094	$ (10,270)	(425)	194
Beginning Balance (in shares) at Mar. 31, 2021			342.9			155.7
Beginning Balance at Mar. 31, 2021	2,225	2,030	$ 3	739	11,632	$ (9,904)	(440)	195
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income/ (loss)	577	577			577
Dividends	(115)	(115)			(115)
Stock-based compensation	41	41		41
Shares issued for stock-based compensation plans at average cost, net (in shares)						0.1
Shares issued for stock-based compensation plans at average cost, net	9	9		4		$ 5
Treasury shares repurchased (in shares)						(1.1)
Treasury shares repurchased	(371)	(371)				$ (371)
Currency translation adjustment, net of net investment hedge activity (net of tax)	6	7					7	(1)
Net actuarial gains and prior service cost (net of tax)	0
Amortization of prior service costs/actuarial losses and settlement charge	8	8					8
Ending Balance (in shares) at Jun. 30, 2021			342.9			156.7
Ending Balance at Jun. 30, 2021	$ 2,380	$ 2,186	$ 3	$ 784	$ 12,094	$ (10,270)	$ (425)	$ 194

XML

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Statement of Stockholders' Equity [Abstract]
Dividends (in USD per share)	$ 0.62	$ 0.56	$ 1.24	$ 1.12
Currency translation adjustment, net of net investment hedge activity, tax expense (benefit)	$ 11	$ (25)	$ 25
Net actuarial gains and prior service cost, tax expense (benefit)	0	2	0	$ 2
Amortization of prior service costs and actuarial losses, tax expense (benefit)	$ 2	0	$ 3	1
Net realized and unrealized gain on cash flow hedges, tax expense (benefit)		$ (6)		$ (18)

XML

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Moody’s is a global integrated risk assessment firm that empowers organizations and investors to make better decisions. Moody’s reports in two reportable segments: MIS and MA.

MIS publishes credit ratings and provides assessment services on a wide range of debt obligations and the entities that issue such obligations in markets worldwide. Revenue is primarily derived from the originators and issuers of such transactions who use MIS ratings in 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.

MA is a global provider of data and analytic solutions which help companies make better and faster decisions. MA’s analytic models, industry insights, software tools and proprietary data assets allow companies to inform and perform many critical business activities with trust and confidence. MA’s approach to aggregating, broadening and deepening available data, research, analytic tools and software solutions fosters a more integrated and efficient delivery to MA's customers resulting in better decisions around risks and opportunities.

These interim financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the Company’s consolidated financial statements and related notes in the Company’s 2020 annual report on Form 10-K filed with the SEC on February 22, 2021. The results of interim periods are not necessarily indicative of results for the full year or any subsequent period. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented have been included. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

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

Adoption of New Accounting Standards

On January 1, 2021, the Company adopted ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 Financial Instruments.” This ASU clarifies and improves guidance related to the recently issued standards updates on credit losses, hedging, and recognition and measurement of financial instruments. The Company adopted this ASU prospectively and it did not have a material impact on the Company's current financial statements.

On January 1, 2021, the Company adopted ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This ASU simplifies the accounting for income taxes by eliminating certain exceptions to the general principles in Topic 740, Income Taxes, and clarifies certain aspects of the existing guidance to promote consistency among reporting entities. Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company adopted this ASU prospectively and it did not have a material impact on the Company's current financial statements.

Recently Issued Accounting Standards

In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform - Scope,” which clarified the scope and application of the original guidance, ASU No. 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting" ("ASU No. 2020-04"), issued in March 2020. ASU No. 2020-04 provides temporary optional expedients 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.

COVID-19

The COVID-19 pandemic has not had a material adverse impact on the Company's reported results to date and is currently not expected to have a material adverse impact on its near-term outlook. However, Moody's is unable to predict the longer-term impact that the pandemic may have on its business, future results of operations, financial position or cash flows due to numerous uncertainties.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Pursuant to a strategic reorganization in the MA operating segment which was completed in the second quarter of 2021, the Company realigned its MA reporting units used in assessing goodwill for impairment as of June 30, 2021. Accordingly, the Company revised its accounting policy for goodwill to reflect the change in MA's reporting units, which is discussed below. All other significant accounting policies described in the Form 10-K for the year ended December 31, 2020 remain unchanged. This reorganization did not result in a change to the Company's reportable segments.

Goodwill

Moody’s evaluates its goodwill for impairment at the reporting unit level, defined as an operating segment (i.e., MIS and MA), 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.

Prior to the second quarter of 2021, MA's reporting unit structure consisted of five reporting units (Content, ERS, MALS, Bureau van Dijk and Reis). Pursuant to a strategic reorganization in the MA segment which was completed in the second quarter of 2021, MA's reporting unit structure has been reorganized into two reporting units. MA’s two new reporting units generally consist of: i) businesses offering data and data-driven analytical solutions; and ii) risk-management software, workflow and CRE solutions.

The Company performed qualitative assessments of the reporting units impacted by the reorganization immediately before and after the reorganization became effective. These qualitative assessments resulted in the Company determining that it was not more likely than not that the fair value of any reporting unit was less than its carrying amount.

The Company will perform a quantitative assessment on the new reporting units as of July 31, 2021, the date of the Company’s annual goodwill impairment assessment, which will provide new baseline valuations under the new reporting unit structure.

XML

REVENUES

6 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

REVENUES

REVENUES

Revenue by Category

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
MIS:
Corporate finance (CFG)
Investment-grade	$	102	$	291	$	236	$	435
High-yield	124		99		265		174
Bank loans	157		43		337		132
Other accounts (1)	167		139		317		284
Total CFG	550		572		1,155		1,025
Financial institutions (FIG)
Banking	101		88		210		174
Insurance	33		44		76		74
Managed investments	13		8		21		14
Other accounts	3		2		5		5
Total FIG	150		142		312		267
Public, project and infrastructure finance (PPIF)
Public finance / sovereign	63		64		130		121
Project and infrastructure	67		69		143		121
Total PPIF	130		133		273		242
Structured finance (SFG)
Asset-backed securities	33		23		59		45
RMBS	31		23		58		50
CMBS	23		13		47		30
Structured credit	53		21		91		50
Other accounts	—		1		1		2
Total SFG	140		81		256		177
Total ratings revenue	970		928		1,996		1,711
MIS Other	10		10		20		21
Total external revenue	980		938		2,016		1,732
Intersegment revenue	42		35		82		72
Total MIS	1,022		973		2,098		1,804
MA:
Research, data and analytics (RD&A)	435		366		854		724
Enterprise risk solutions (ERS)	138		131		283		269
Total external revenue	573		497		1,137		993
Intersegment revenue	2		2		4		4
Total MA	575		499		1,141		997
Eliminations	(44)		(37)		(86)		(76)
Total MCO	$	1,553	$	1,435	$	3,153	$	2,725

(1) Other includes: recurring monitoring fees of a rated debt obligation and/or entities that issue such obligations as well as fees from programs such as commercial paper, medium term notes, and ICRA corporate finance revenue.

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

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
	U.S.		Non-U.S		Total		U.S.		Non-U.S		Total
MIS:
Corporate finance	$	345	$	205	$	550	$	413	$	159	$	572
Financial institutions	69		81		150		70		72		142
Public, project and infrastructure finance	79		51		130		87		46		133
Structured finance	88		52		140		45		36		81
Total ratings revenue	581		389		970		615		313		928
MIS Other	1		9		10		1		9		10
Total MIS	582		398		980		616		322		938
MA:
Research, data and analytics	190		245		435		167		199		366
Enterprise risk solutions	59		79		138		54		77		131
Total MA	249		324		573		221		276		497
Total MCO	$	831	$	722	$	1,553	$	837	$	598	$	1,435

	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
	U.S.		Non-U.S		Total		U.S.		Non-U.S		Total
MIS:
Corporate finance	$	759	$	396	$	1,155	$	727	$	298	$	1,025
Financial institutions	155		157		312		130		137		267
Public, project and infrastructure finance	157		116		273		155		87		242
Structured finance	156		100		256		106		71		177
Total ratings revenue	1,227		769		1,996		1,118		593		1,711
MIS Other	2		18		20		1		20		21
Total MIS	1,229		787		2,016		1,119		613		1,732
MA:
Research, data and analytics	373		481		854		325		399		724
Enterprise risk solutions	114		169		283		107		162		269
Total MA	487		650		1,137		432		561		993
Total MCO	$	1,716	$	1,437	$	3,153	$	1,551	$	1,174	$	2,725

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
MIS:
U.S.	$	582	$	616	$	1,229	$	1,119
Non-U.S.:
EMEA	248		183		496		354
Asia-Pacific	100		90		197		171
Americas	50		49		94		88
Total Non-U.S.	398		322		787		613
Total MIS	980		938		2,016		1,732
MA:
U.S.	249		221		487		432
Non-U.S.:
EMEA	233		190		463		382
Asia-Pacific	55		54		114		109
Americas	36		32		73		70
Total Non-U.S.	324		276		650		561
Total MA	573		497		1,137		993
Total MCO	$	1,553	$	1,435	$	3,153	$	2,725

The following tables summarize the split between transaction and recurring revenue. In the MIS segment, excluding MIS Other, transaction revenue represents the initial rating of a new debt issuance as well as other one-time fees while recurring revenue represents the 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. In MIS Other, transaction revenue represents revenue from professional services and recurring revenue represents subscription-based revenues. In the MA segment, recurring revenue represents subscription-based revenues and software maintenance revenue. Transaction revenue in MA represents perpetual software license fees and revenue from software implementation services, risk management advisory projects, and training and certification services.

	Three Months Ended June 30,
	2021										2020
	Transaction				Recurring			Total			Transaction			Recurring			Total
Corporate Finance	$	427			$	123		$	550		$	457		$	115		$	572
	78		%		22		%	100		%	80		%	20		%	100		%
Financial Institutions	$	79			$	71		$	150		$	76		$	66		$	142
	53		%		47		%	100		%	54		%	46		%	100		%
Public, Project and Infrastructure Finance	$	88			$	42		$	130		$	96		$	37		$	133
	68		%		32		%	100		%	72		%	28		%	100		%
Structured Finance	$	92			$	48		$	140		$	35		$	46		$	81
	66		%		34		%	100		%	43		%	57		%	100		%
MIS Other	$	—			$	10		$	10		$	—		$	10		$	10
	—		%		100		%	100		%	—		%	100		%	100		%
Total MIS	$	686			$	294		$	980		$	664		$	274		$	938
	70		%		30		%	100		%	71		%	29		%	100		%
Research, data and analytics	$	22			$	413		$	435		$	16		$	350		$	366
	5		%		95		%	100		%	4		%	96		%	100		%
Enterprise risk solutions	$	16			$	122		$	138		$	26		$	105		$	131
	12		%		88		%	100		%	20		%	80		%	100		%
Total MA	$	38		(1)	$	535		$	573		$	42		$	455		$	497
	7		%		93		%	100		%	8		%	92		%	100		%
Total Moody's Corporation	$	724			$	829		$	1,553		$	706		$	729		$	1,435
	47		%		53		%	100		%	49		%	51		%	100		%

	Six Months Ended June 30,
	2021										2020
	Transaction				Recurring			Total			Transaction			Recurring			Total
Corporate Finance	$	914			$	241		$	1,155		$	795		$	230		$	1,025
	79		%		21		%	100		%	78		%	22		%	100		%
Financial Institutions	$	169			$	143		$	312		$	136		$	131		$	267
	54		%		46		%	100		%	51		%	49		%	100		%
Public, Project and Infrastructure Finance	$	188			$	85		$	273		$	165		$	77		$	242
	69		%		31		%	100		%	68		%	32		%	100		%
Structured Finance	$	158			$	98		$	256		$	85		$	92		$	177
	62		%		38		%	100		%	48		%	52		%	100		%
MIS Other	$	2			$	18		$	20		$	2		$	19		$	21
	10		%		90		%	100		%	10		%	90		%	100		%
Total MIS	$	1,431			$	585		$	2,016		$	1,183		$	549		$	1,732
	71		%		29		%	100		%	68		%	32		%	100		%
Research, data and analytics	$	42			$	812		$	854		$	34		$	690		$	724
	5		%		95		%	100		%	5		%	95		%	100		%
Enterprise risk solutions	$	39			$	244		$	283		$	58		$	211		$	269
	14		%		86		%	100		%	22		%	78		%	100		%
Total MA	$	81		(1)	$	1,056		$	1,137		$	92		$	901		$	993
	7		%		93		%	100		%	9		%	91		%	100		%
Total Moody's Corporation	$	1,512			$	1,641		$	3,153		$	1,275		$	1,450		$	2,725
	48		%		52		%	100		%	47		%	53		%	100		%

(1) Revenue from software implementation services and risk management advisory projects, while classified by management as transactional revenue, is recognized over time under the Revenue Accounting Standard (please also refer to the following table).

The following table presents the timing of revenue recognition:

	Three Months Ended June 30, 2021						Six Months Ended June 30, 2021
	MIS		MA		Total		MIS		MA		Total
Revenue recognized at a point in time	$	686	$	20	$	706	$	1,431	$	49	$	1,480
Revenue recognized over time	294		553		847		585		1,088		1,673
Total	$	980	$	573	$	1,553	$	2,016	$	1,137	$	3,153

	Three Months Ended June 30, 2020						Six Months Ended June 30, 2020
	MIS		MA		Total		MIS		MA		Total
Revenue recognized at a point in time	$	664	$	20	$	684	$	1,183	$	59	$	1,242
Revenue recognized over time	274		477		751		549		934		1,483
Total	$	938	$	497	$	1,435	$	1,732	$	993	$	2,725

Unbilled receivables, deferred revenue and remaining performance obligations

Unbilled receivables

At June 30, 2021 and December 31, 2020, accounts receivable, net included $429 million and $361 million, respectively, of unbilled receivables, net related to the MIS segment. Certain MIS arrangements contain contractual terms whereby the customers are billed in arrears for annual monitoring services, requiring revenue to be accrued as an unbilled receivable as such services are provided.

In addition, for certain MA arrangements, the timing of when the Company has the unconditional right to consideration and recognizes revenue occurs prior to invoicing the customer. Consequently, at June 30, 2021 and December 31, 2020, accounts receivable, net included $95 million and $98 million, respectively, of unbilled receivables, net related to the MA segment.

Deferred revenue

The Company recognizes deferred revenue when a contract requires a customer to pay consideration to the Company in advance of when revenue related to that contract is recognized. This deferred revenue is relieved when the Company satisfies the related performance obligation and revenue is recognized.

Significant changes in the deferred revenue balances during the three and six months ended June 30, 2021 and 2020 are as follows:

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
	MIS		MA		Total		MIS		MA		Total
Balance at March 31,	$	388	$	940	$	1,328	$	379	$	843	$	1,222
Changes in deferred revenue
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(119)		(338)		(457)		(115)		(341)		(456)
Increases due to amounts billable excluding amounts recognized as revenue during the period	98		262		360		100		234		334
Effect of exchange rate changes	1		3		4		1		4		5
Total changes in deferred revenue	(20)		(73)		(93)		(14)		(103)		(117)
Balance at June 30,	$	368	$	867	$	1,235	$	365	$	740	$	1,105

	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
	MIS		MA		Total		MIS		MA			Total
Balance at December 31,	$	313	$	874	$	1,187	$	322	$	840		$	1,162
Changes in deferred revenue
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(162)		(565)		(727)		(167)		(578)		(1)	(745)
Increases due to amounts billable excluding amounts recognized as revenue during the period	219		555		774		213		478		(1)	691
Increases due to acquisitions during the period	—		4		4		—		20			20
Effect of exchange rate changes	(2)		(1)		(3)		(3)		(20)			(23)
Total changes in deferred revenue	55		(7)		48		43		(100)			(57)
Balance at June 30,	$	368	$	867	$	1,235	$	365	$	740		$	1,105
Deferred revenue - current	$	279	$	863	$	1,142	$	265	$	736		1,001
Deferred revenue - noncurrent	$	89	$	4	$	93	$	100	$	4		104

(1) The 2020 amounts were both reduced by $99 million from amounts previously disclosed in the Form 10-Q for the six months ended June 30, 2020.

For the MIS segment, the changes in the deferred revenue balance during the three and six months ended June 30, 2021 were primarily related to the significant portion of contract renewals that occurred during the first quarter of 2021 and are generally recognized over a one year period.

For the MA segment, the decrease in deferred revenue for the three months ended June 30, 2021 was primarily due to the recognition of annual subscription and maintenance billings from December 2020 and January 2021. For the six months ended June 30, 2021, the decrease in the deferred revenue balance is attributable to recognition of revenues related to the aforementioned December 2020 billings being partially offset by the impact of the high concentration of January 2021 billings.

Remaining performance obligations

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 June 30, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $118 million. The Company expects to recognize into revenue approximately 20% 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 from the amounts stated above relating to unsatisfied performance obligations for contracts with an original expected length of one year or less.

Remaining performance obligations in the MA segment include both amounts recorded as deferred revenue on the balance sheet as of June 30, 2021 as well as amounts not yet invoiced to customers as of June 30, 2021, largely reflecting future revenue related to signed multi-year arrangements for hosted and installed subscription-based products. As of June 30, 2021, 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.

XML

STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

STOCK-BASED COMPENSATION

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,
	2021		2020		2021		2020
Stock-based compensation cost	$	41	$	35	$	86	$	72
Tax benefit	$	10	$	7	$	21	$	14

During the first six months of 2021, the Company granted 0.1 million employee stock options, which had a weighted average grant date fair value of $67.41 per share based on the Black-Scholes option-pricing model. The Company also granted 0.5 million shares of restricted stock in the first six months of 2021, which had a weighted average grant date fair value of $277.22 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 are 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 $268.85 per share.

The following weighted average assumptions were used in determining the fair value for options granted in 2021:

Expected dividend yield	0.89	%
Expected stock volatility	28	%
Risk-free interest rate	0.81 %
Expected holding period	5.6 years

Unrecognized stock-based compensation expense at June 30, 2021 was $11 million and $230 million for stock options and unvested restricted stock, respectively, which is expected to be recognized over a weighted average period of 2.5 years and 2.6 years, respectively. Additionally, there was $39 million of unrecognized stock-based compensation expense relating to the aforementioned non-market-based performance-based awards, which is expected to be recognized over a weighted average period of 2.1 years.

The following tables summarize information relating to stock option exercises and restricted stock vesting:

	Six Months Ended June 30,
	2021		2020
Exercise of stock options:
Proceeds from stock option exercises	$	16	$	23
Aggregate intrinsic value	$	35	$	74
Tax benefit realized upon exercise	$	8	$	18
Number of shares exercised	0.2		0.4
Vesting of restricted stock:
Fair value of shares vested	$	187	$	193
Tax benefit realized upon vesting	$	43	$	45
Number of shares vested	0.7		0.8
Vesting of performance-based restricted stock:
Fair value of shares vested	$	28	$	70
Tax benefit realized upon vesting	$	7	$	17
Number of shares vested	0.1		0.3

XML

INCOME TAXES

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Moody’s effective tax rate was 23.9% and 23.6% for the three months ended June 30, 2021 and 2020, respectively and 19.0% for both six months ended June 30, 2021 and 2020 periods. The Company’s year to date tax expense differs from the tax computed by applying its estimated annual effective tax rate to the year-to-date pre-tax earnings primarily due to Excess Tax Benefits from stock compensation of $26 million and net reductions in UTPs of $61 million related to a settlement and a lapse of a statute of limitations.

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 (expense) income, net. The Company had an increase in its UTPs of $4 million ($4 million net of federal tax) during the second quarter of 2021 and a decrease in its UTPs of $76 million ($67 million, net of federal tax) during the first six months of 2021, which primarily related to the aforementioned resolution of uncertain tax positions. The Company also reversed $40 million in accrued interest in connection with these matters in the first quarter of 2021.

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 for 2019 remains open to examination and 2017 and 2018 are currently under examination. The Company’s New York City tax return for 2014 through 2017 are currently under examination. The Company’s U.K. tax return for 2012 is currently under examination and its returns for 2013 through 2019 remain open to examination.

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

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

	Six Months Ended June 30,
	2021		2020
Income taxes paid	$	327	$	111

XML

WEIGHTED AVERAGE SHARES OUTSTANDING

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

WEIGHTED AVERAGE SHARES OUTSTANDING

WEIGHTED AVERAGE SHARES OUTSTANDING

Below is a reconciliation of basic to diluted shares outstanding:

	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
Basic	186.7	187.7	187.0	187.6
Dilutive effect of shares issuable under stock-based compensation plans	1.2	1.3	1.2	1.7
Diluted	187.9	189.0	188.2	189.3
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above	0.2	0.3	0.3	0.3

The calculation of diluted EPS requires certain assumptions regarding the use of both cash proceeds and assumed proceeds that would be received upon the exercise of stock options and vesting of restricted stock outstanding as of June 30, 2021 and 2020.

XML

CASH EQUIVALENTS AND INVESTMENTS

6 Months Ended

Jun. 30, 2021

Cash and Cash Equivalents [Abstract]

CASH EQUIVALENTS AND INVESTMENTS

CASH EQUIVALENTS AND INVESTMENTS

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

	As of June 30, 2021
							Balance sheet location
	Cost		Gains/(Losses)		Fair Value		Cash and cash equivalents		Short-term investments		Other assets
Certificates of deposit and money market deposit accounts (1)	$	1,481	$	—	$	1,481	$	1,370	$	88	$	23
Mutual funds	$	53	$	7	$	60	$	—	$	—	$	60

	As of December 31, 2020
							Balance sheet location
	Cost		Gains/(Losses)		Fair Value		Cash and cash equivalents		Short-term investments		Other assets
Certificates of deposit and money market deposit accounts (1)	$	1,430	$	—	$	1,430	$	1,325	$	99	$	6
Mutual funds	$	54	$	6	$	60	$	—	$	—	$	60

(1) Consists of time deposits and money market deposit accounts. The remaining contractual maturities for the certificates of deposits classified as short-term investments were one month to 12 months at both June 30, 2021 and December 31, 2020. The remaining contractual maturities for the certificates of deposits classified in other assets are 13 months to 23 months at both June 30, 2021 and December 31, 2020. Time deposits with a maturity of less than 90 days at time of purchase are classified as cash and cash equivalents.

In addition, the Company invested in Corporate-Owned Life Insurance (COLI) in the first quarter of 2020. As of June 30, 2021 and December 31, 2020, the contract value of the COLI was $36 million and $17 million, respectively.

XML

ACQUISITIONS

6 Months Ended

Jun. 30, 2021

Business Combination and Asset Acquisition [Abstract]

ACQUISITIONS

ACQUISITIONS

The business combinations described below are 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.

Cortera

On March 19, 2021, the Company acquired 100% of Cortera, a provider of North American credit data and workflow solutions.

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

Cash paid at closing	$	138
Additional consideration paid to sellers in 2021 (1)	1
Total consideration	$	139

(1) Represents additional consideration paid to the sellers following finalization of customary post-closing completion adjustments.

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

Current assets			$	7
Intangible assets:
Database (10 year useful life)	$	38
Customer relationships (18 year useful life)	9
Product technology (8 year useful life)	9
Trade name (5 year useful life)	1
Total intangible assets (11 year weighted average useful life)			57
Goodwill			95
Other assets			2
Liabilities:
Accounts payable and accrued liabilities	$	(1)
Deferred revenue	(4)
Deferred tax liabilities	(15)
Other liabilities	(2)
Total liabilities			(22)
Net assets acquired			$	139

The Company has performed a preliminary valuation analysis of the fair market value of assets and liabilities of the Cortera business. The final purchase price allocation will be determined when the Company has completed and fully reviewed the detailed valuations. The final allocation could differ materially from the preliminary allocation. The final allocation may include changes in allocations to acquired intangible assets as well as goodwill and other changes to assets and liabilities including reserves for UTPs and deferred tax liabilities. The estimated useful lives of acquired intangibles assets are also preliminary.

Current assets in the table above include acquired cash of $4 million and accounts receivable of approximately $2 million.

Goodwill

The goodwill recognized as a result of this acquisition includes, among other things, the value of combining the complementary risk assessment products of the Company and Cortera, which is expected to extend the Company’s reach to new and evolving market segments as well as cost savings synergies, expected new customer acquisitions and products.

Goodwill, which has been assigned to the MA segment, is not deductible for tax purposes.

Transaction costs

Transaction costs directly related to the Cortera acquisition were not material.

RDC

On February 13, 2020, the Company acquired 100% of RDC, a provider of anti-money laundering and know-your-customer data and due diligence services.

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

Cash paid at closing	$	700
Additional consideration paid to sellers in 2020 (1)	2
Total consideration	$	702

(1) Represents additional consideration paid to the sellers following finalization of customary post-closing completion adjustments.

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

Current assets			$	24
Intangible assets:
Customer relationships (25 year useful life)	$	174
Database (10 year useful life)	86
Product technology (4 year useful life)	17
Trade name (3 year useful life)	3
Total intangible assets (19 year weighted average life)			280
Goodwill			494
Other assets			2
Liabilities:
Accounts payable and accrued liabilities	$	(5)
Deferred revenue	(20)
Deferred tax liabilities	(71)
Other liabilities	(2)
Total liabilities			(98)
Net assets acquired			$	702

Current assets in the table above include acquired cash of $6 million and accounts receivable of approximately $14 million.

Goodwill

The goodwill recognized as a result of this acquisition includes, among other things, the value of combining the complementary product portfolios of the Company and RDC, which is expected to extend the Company’s reach to new and evolving market segments as well as cost savings synergies, expected new customer acquisitions and products.

Goodwill, which has been assigned to the MA segment, is not deductible for tax purposes.

Transaction costs

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

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

6 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company is exposed to global market risks, including risks from changes in FX rates and changes in interest rates. Accordingly, the Company uses derivatives in certain instances to manage the aforementioned financial exposures that occur in the normal course of business. The Company does not hold or issue derivatives for speculative purposes.

Derivatives and non-derivative instruments designated as accounting hedges:

Fair Value Hedges

Interest Rate Swaps

The Company has entered into interest rate swaps to convert the fixed interest rate on certain of its long-term debt to a floating interest rate based on the 3-month LIBOR and 6-month LIBOR. The purpose of these hedges is to mitigate the risk associated with changes in the fair value of the long-term debt, thus the Company has designated these swaps as fair value hedges. The fair value of the swaps is adjusted quarterly with a corresponding adjustment to the carrying value of the debt. The changes in the fair value of the swaps and the underlying hedged item generally offset and the net cash settlements on the swaps are recorded each period within interest expense, net in the Company’s consolidated statements of operations.

The following table summarizes the Company’s interest rate swaps designated as fair value hedges:

		Notional Amount
Hedged Item	Nature of Swap	As of June 30, 2021		As of December 31, 2020		Floating Interest Rate
2012 Senior Notes due 2022	Pay Floating/Receive Fixed	$	330	$	330	3-month USD LIBOR
2017 Senior Notes due 2023	Pay Floating/Receive Fixed	$	250	$	250	3-month USD LIBOR
2017 Senior Notes due 2028	Pay Floating/Receive Fixed	$	500	$	500	3-month USD LIBOR
2020 Senior Notes due 2025	Pay Floating/Receive Fixed	$	300	$	300	6-month USD LIBOR
Total		$	1,380	$	1,380

Refer to Note 16 for information on the cumulative amount of fair value hedging adjustments included in the carrying amount of the above hedged items.

The following table summarizes the impact to the statements of operations of the Company’s interest rate swaps designated as fair value hedges:

Total amounts of financial statement line item presented in the statements of operations in which the effects of fair value hedges are recorded		Amount of income/(loss) recognized in the consolidated statements of operations
		Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020
Interest expense, net		$	(49)	$	(60)	$	(56)	$	(100)
Descriptions	Location on Consolidated Statements of Operations
Net interest settlements and accruals on interest rate swaps	Interest expense, net	$	6	$	5	$	11	$	8
Fair value changes on interest rate swaps	Interest expense, net	$	—	$	2	$	(24)	$	60
Fair value changes on hedged debt	Interest expense, net	$	—	$	(2)	$	24	$	(60)

Net investment hedges

Debt designated as net investment hedges

The Company has designated €500 million of the 2015 Senior Notes Due 2027 and €750 million of the 2019 Senior Notes due 2030 as net investment hedges to mitigate FX exposure related to a portion of the Company’s euro net investment in certain foreign subsidiaries against changes in euro/USD exchange rates. These hedges are designated as accounting hedges under the applicable sections of ASC Topic 815 and will end upon the repayment of the notes in 2027 and 2030, respectively, unless terminated early at the discretion of the Company.

Cross currency swaps designated as net investment hedges

The Company enters into cross-currency swaps to mitigate FX exposure related to a portion of the Company’s euro net investment in certain foreign subsidiaries against changes in euro/USD exchange rates. The following table provides information on the cross-currency swaps designated as net investment hedges under ASC Topic 815:

June 30, 2021
	Pay			Receive
Nature of Swap	Notional Amount		Weighted Average Interest Rate	Notional Amount		Weighted Average Interest Rate
Pay Fixed/Receive Fixed	€	1,060	2.15%	$	1,220	4.45%
Pay Floating/Receive Floating	959		Based on 3-month EURIBOR	1,080		Based on 3-month USD LIBOR
Total	€	2,019		$	2,300

December 31, 2020
	Pay			Receive
Nature of Swap	Notional Amount		Weighted Average Interest Rate	Notional Amount		Weighted Average Interest Rate
Pay Fixed/Receive Fixed	€	1,079	1.43%	$	1,220	3.96%
Pay Floating/Receive Floating	959		Based on 3-month EURIBOR	1,080		Based on 3-month USD LIBOR
Total	€	2,038		$	2,300

As of June 30, 2021 these hedges will expire and the notional amounts will be settled as follows unless terminated early at the discretion of the Company:

Years Ending December 31,
2021 (After June 30,)	€	—
2022	€	438
2023	€	442
2024	€	443
2026	€	450
2027	€	246
Total	€	2,019

Forward contracts designated as net investment hedges

The Company also enters into forward contracts to mitigate FX exposure related to a portion of the Company’s euro net investment in certain foreign subsidiaries against changes in euro/USD and GBP/euro exchange rates. The following table summarizes the notional amounts of the Company's outstanding forward contracts that were designated as net investment hedges:

Notional amount of net investment hedges	June 30, 2021				December 31, 2020
	Sell		Buy		Sell		Buy
Contract to sell EUR for USD	€	597	$	728	€	524	$	627
Contract to sell GBP for EUR	£	134	€	155	£	134	€	148

These forward contracts will expire in August 2021.

Cash Flow Hedges

Interest Rate Forward Contracts

In January 2020, the Company entered into $300 million notional amount treasury rate locks with an average locked-in U.S. 30-year Treasury rate of 2.0103%, which were designated as cash flow hedges and used to manage the Company’s interest rate risk during the period prior to an anticipated issuance of 30-year debt. The treasury lock interest rate forward contracts matured on April 30, 2020, resulting in a cumulative loss of $68 million, which was recognized in AOCL. The loss on the Treasury rate lock will be reclassified from AOCL to earnings in the same period that the hedged transaction (i.e. interest payments on the 3.25% 2020 Senior Notes, due 2050) impacts earnings.

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

Derivative and Non-Derivative Instruments in Net Investment Hedging Relationships	Amount of Gain/(Loss) Recognized in AOCL on Derivative, net of Tax				Amount of Gain/(Loss) Reclassified from AOCL into Income, net of Tax				Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
	Three Months Ended June 30,				Three Months Ended June 30,				Three Months Ended June 30,
	2021		2020		2021		2020		2021		2020
FX forward contracts	$	—	$	—	$	—	$	—	$	—	$	—
Cross currency swaps	(18)		(49)		—		—		9		14
Long-term debt	(10)		(24)		—		—		—		—
Total net investment hedges	$	(28)	$	(73)	$	—	$	—	$	9	$	14
Derivatives in Cash Flow Hedging Relationships
Interest rate contracts	—		(14)		—		—		—		—
Total cash flow hedges	—		(14)		—		—		—		—
Total	$	(28)	$	(87)	$	—	$	—	$	9	$	14

Derivative and Non-Derivative Instruments in Net Investment Hedging Relationships	Amount of Gain/(Loss) Recognized in AOCL on Derivative, net of Tax				Amount of Gain/(Loss) Reclassified from AOCL into Income, net of Tax				Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
	Six Months Ended June 30,				Six Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020		2021		2020
FX forward contracts	$	16	$	—	$	1	$	—	$	—	$	—
Cross currency swaps	54		17		—		—		19		30
Long-term debt	35		(1)		—		—		—		—
Total net investment hedges	$	105	$	16	$	1	$	—	$	19	$	30
Derivatives in Cash Flow Hedging Relationships
Interest rate contracts	—		(50)		(1)		(1)		—		—
Total cash flow hedges	—		(50)		(1)		(1)		—		—
Total	$	105	$	(34)	$	—	$	(1)	$	19	$	30

The cumulative amount of net investment hedge and cash flow hedge gains (losses) remaining in AOCL is as follows:

	Cumulative Gains/(Losses), net of tax
	June 30, 2021		December 31, 2020
Net investment hedges
Cross currency swaps	$	(70)	$	(124)
FX forwards	27		12
Long-term debt	(73)		(108)
Total net investment hedges	$	(116)	$	(220)
Cash flow hedges
Interest rate contracts	$	(50)	$	(51)
Cross currency swaps	2		2
Total cash flow hedges	(48)		(49)
Total net loss in AOCL	$	(164)	$	(269)

Derivatives not designated as accounting hedges:

Foreign exchange forwards

The Company also enters into foreign exchange forward contracts to mitigate the change in fair value on certain assets and liabilities denominated in currencies other than a subsidiary’s functional currency. These forward contracts are not designated as accounting hedges under the applicable sections of Topic 815 of the ASC. Accordingly, changes in the fair value of these contracts are recognized immediately in other non-operating income, net in the Company’s consolidated statements of operations along with the FX gain or loss recognized on the assets and liabilities denominated in a currency other than the subsidiary’s functional currency. These contracts have expiration dates at various times through August 2021.

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

	June 30, 2021				December 31, 2020
Notional amount of currency pair:	Sell		Buy		Sell		Buy
Contracts to sell USD for GBP	$	424	£	301	$	295	£	222
Contracts to sell USD for Japanese yen	$	15	¥	1,600	$	15	¥	1,600
Contracts to sell USD for Canadian dollars	$	105	C$	129	$	107	C$	140
Contracts to sell USD for Singapore dollars	$	59	S$	79	$	59	S$	79
Contracts to sell USD for euros	$	549	€	450	$	447	€	376
Contracts to sell Euros for GBP	€	135	£	116	€	135	£	121
Contracts to sell USD for Russian ruble	$	13	₽	1,000	$	13	₽	1,000
Contracts to sell USD for Indian rupee	$	18	₹	1,350	$	18	₹	1,350

NOTE: € = euro, £ = British pound, $ = U.S. dollar, ¥ = Japanese yen, C$ = Canadian dollar, S$= Singapore dollars, ₽= Russian ruble, ₹= Indian rupee

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

Derivatives not designated as accounting hedges	Location on Consolidated Statements of Operations	Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020
Foreign exchange forwards	Other non-operating income, net	$	(1)	$	5	$	(7)	$	(35)

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

	Derivative and Non-Derivative Instruments
	Balance Sheet Location	June 30, 2021		December 31, 2020
Assets:
Derivatives designated as accounting hedges:
Cross-currency swaps designated as net investment hedges	Other assets	$	7	$	—
Interest rate swaps designated as fair value hedges	Other assets	37		57
FX forwards designated as net investment hedges	Other current assets	19		—
Total derivatives designated as accounting hedges		63		57
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities	Other current assets	3		31
Total assets		$	66	$	88
Liabilities:
Derivatives designated as accounting hedges:
FX forwards designated as net investment hedges	Accounts payable and accrued liabilities	$	1	$	16
Cross-currency swaps designated as net investment hedges	Accounts payable and accrued liabilities	—		23
Cross-currency swaps designated as net investment hedges	Other liabilities	80		144
Interest rate swaps designated as fair value hedges	Other liabilities	5		1
Total derivatives designated as accounting hedges		86		184
Non-derivatives designated as accounting hedges:
Long-term debt designated as net investment hedge	Long-term debt	1,482		1,530
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities	Accounts payable and accrued liabilities	26		2
Total liabilities		$	1,594	$	1,716

XML

GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

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

	Six Months Ended June 30, 2021
	MIS						MA						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	$	311	$	—	$	311	$	4,257	$	(12)	$	4,245	$	4,568	$	(12)	$	4,556
Additions/ adjustments (1)	—		—		—		95		—		95		95		—		95
Foreign currency translation adjustments	1		—		1		(62)		—		(62)		(61)		—		(61)
Ending balance	$	312	$	—	$	312	$	4,290	$	(12)	$	4,278	$	4,602	$	(12)	$	4,590

	Year Ended December 31, 2020
	MIS						MA						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	$	315	$	—	$	315	$	3,419	$	(12)	$	3,407	$	3,734	$	(12)	$	3,722
Additions/ adjustments (2)	(2)		—		(2)		628		—		628		626		—		626
Foreign currency translation adjustments	(2)		—		(2)		210		—		210		208		—		208
Ending balance	$	311	$	—	$	311	$	4,257	$	(12)	$	4,245	$	4,568	$	(12)	$	4,556

(1) The 2021 additions/adjustments for the MA segment in the table above relate to the acquisition of Cortera.

(2) The 2020 additions/adjustments for the MA segment in the table above relate to the acquisitions of RDC, AM, ZMFS, and Catylist.

Acquired intangible assets and related amortization consisted of:

	June 30, 2021		December 31, 2020
Customer relationships	$	1,611	$	1,623
Accumulated amortization	(347)		(313)
Net customer relationships	1,264		1,310
Software/product technology	442		441
Accumulated amortization	(195)		(177)
Net software/product technology	247		264
Database	181		144
Accumulated amortization	(37)		(29)
Net database	144		115
Trade names	160		161
Accumulated amortization	(42)		(38)
Net trade names	118		123
Other (1)	54		55
Accumulated amortization	(43)		(43)
Net other	11		12
Total acquired intangible assets, net	$	1,784	$	1,824

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

Amortization expense relating to acquired intangible assets is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Amortization expense	$	36	$	31	$	71	$	59

Estimated future amortization expense for acquired intangible assets subject to amortization is as follows:

Year Ending December 31,
2021 (After June 30,)	$	63
2022	133
2023	129
2024	125
2025	121
Thereafter	1,213
Total estimated future amortization	$	1,784

Matters concerning the ICRA reporting unit

ICRA has reported various matters relating to: (i) an adjudication order and fine imposed by the Securities and Exchange Board of India (SEBI) in connection with credit ratings assigned to one of ICRA’s customers and the customer’s subsidiaries, which are being appealed by ICRA; (ii) an increase in the original fine, which also is being appealed by ICRA; (iii) the completion of internal examinations regarding various anonymous complaints; and (iv) actions taken by ICRA’s board based on the examinations’ findings. As of the date of this quarterly report on Form 10-Q, 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.

XML

RESTRUCTURING

6 Months Ended

Jun. 30, 2021

Restructuring and Related Activities [Abstract]

RESTRUCTURING

RESTRUCTURING

On December 22, 2020, the chief executive officer of Moody’s approved a restructuring program (the “2020 MA Strategic Reorganization Restructuring Program”) that the Company estimates will result in annualized savings of $20 million per year. This program relates to a strategic reorganization in the MA reportable segment consisting of severance and related costs primarily determined under the Company’s existing severance plans. The 2020 MA Strategic Reorganization Restructuring Program resulted in a total of $20 million in pre-tax charges and is substantially complete at June 30, 2021. Cash outlays associated with this program are expected to be $20 million, which will be paid through 2022.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
2020 MA Strategic Reorganization Restructuring Program	$	—	$	—	$	2	$	—

Changes to the restructuring liability for the aforementioned restructuring program during the first six months of 2021 were as follows:

	Employee Termination Costs
Balance as of December 31, 2020	$	18
2020 MA Strategic Reorganization Restructuring Program:
Cost incurred and adjustments	2
Cash payments and adjustments	(8)
Balance as of June 30, 2021	$	12
Cumulative expense incurred to date
2020 MA Strategic Reorganization Restructuring Program:	$	20

As of June 30, 2021, the remaining $12 million restructuring liability related to the 2020 MA Strategic Reorganization Restructuring Program is expected to be paid out through 2022.

XML

FAIR VALUE

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

FAIR VALUE

FAIR VALUE    

The table below presents information about items that are carried at fair value at June 30, 2021 and December 31, 2020:

	Fair value Measurement as of June 30, 2021
Description	Balance		Level 1		Level 2
Assets:
Derivatives (1)	$	66	$	—	$	66
Mutual funds	60		60		—
Total	$	126	$	60	$	66
Liabilities:
Derivatives (1)	$	112	$	—	$	112
Total	$	112	$	—	$	112

	Fair value Measurement as of December 31, 2020
Description	Balance		Level 1		Level 2
Assets:
Derivatives (1)	$	88	$	—	$	88
Mutual funds	60		60		—
Total	$	148	$	60	$	88
Liabilities:
Derivatives (1)	$	186	$	—	$	186
Total	$	186	$	—	$	186

(1) Represents FX forward contracts, interest rate swaps and cross-currency swaps as more fully described in Note 9 to the condensed consolidated financial statements.

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 mutual funds:

Derivatives:

In determining the fair value of the derivative contracts in the table above, the Company utilizes industry standard valuation models. Where applicable, these models project future cash flows and discount the future amounts to a present value using spot rates, forward points, currency volatilities, interest rates as well as the risk of non-performance of the Company and the counterparties with whom it has derivative contracts. The Company established strict counterparty credit guidelines and only enters into transactions with financial institutions that adhere to these guidelines. Accordingly, the risk of counterparty default is deemed to be minimal.

Mutual funds and money market mutual funds:

The mutual funds in the table above are deemed to be equity securities with readily determinable fair values with changes in the fair value recognized through net income under ASC Topic 321. The fair value of these instruments is determined using Level 1 inputs as defined in the ASC Topic 820.

XML

OTHER BALANCE SHEET AND STATEMENT OF OPERATIONS INFORMATION

6 Months Ended

Jun. 30, 2021

Other Balance Sheet And Statement Of Operations Information [Abstract]

OTHER BALANCE SHEET AND STATEMENT OF OPERATIONS INFORMATION

OTHER BALANCE SHEET AND STATEMENTS OF OPERATIONS INFORMATIONThe following tables contain additional detail related to certain balance sheet captions:

	June 30, 2021		December 31, 2020
Other current assets:
Prepaid taxes	$	125	$	94
Prepaid expenses	78		91
Capitalized costs to obtain and fulfill sales contracts	92		93
Foreign exchange forwards on certain assets and liabilities	3		31
Derivative instruments designated as accounting hedges	19		—
Other	62		74
Total other current assets	$	379	$	383
Other assets:
Investments in non-consolidated affiliates	$	151	$	135
Deposits for real-estate leases	14		19
Indemnification assets related to acquisitions	15		15
Mutual funds and fixed deposits	83		66
Company owned life insurance (at contract value)	36		17
Costs to obtain sales contracts	142		134
Derivative instruments designated as accounting hedges	44		57
Pension and other retirement employee benefits	19		21
Other	52		51
Total other assets	$	556	$	515
Accounts payable and accrued liabilities:
Salaries and benefits	$	149	$	197
Incentive compensation	134		226
Customer credits, advanced payments and advanced billings	60		42
Dividends	5		11
Professional service fees	60		53
Interest accrued on debt	72		82
Accounts payable	18		39
Income taxes	108		128
Pension and other retirement employee benefits	46		45
Accrued royalties	23		19
Foreign exchange forwards on certain assets and liabilities	26		2
Restructuring liability	12		18
Derivative instruments designated as accounting hedges	1		39
Other	102		138
Total accounts payable and accrued liabilities	$	816	$	1,039

	June 30, 2021		December 31, 2020
Other liabilities:
Pension and other retirement employee benefits	$	211	$	244
Interest accrued on UTPs	75		113
MAKS indemnification provisions	33		33
Income tax liability - non-current portion	18		18
Derivative instruments designated as accounting hedges	85		145
Other	38		37
Total other liabilities	$	460	$	590

Loss pursuant to the Divestiture of MAKS:

The $9 million loss during the six months ended June 30, 2020 relates to customary post-closing completion adjustments pursuant to the fourth quarter 2019 divestiture of MAKS.

Other Non-Operating Income (Expense):

The following table summarizes the components of other non-operating income (expense):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
FX gain (loss)	$	2	$	(8)	$	—	$	5
Net periodic pension costs - other components (1)	(3)		4		1		7
Income/(loss) from investments in non-consolidated affiliates	1		3		9		—
Other	6		17		12		16
Total	$	6	$	16	$	22	$	28
(1) The amounts for the three and six months ended June 30, 2021 include a $7 million loss related to a settlement of pension obligations

XML

COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS

6 Months Ended

Jun. 30, 2021

Equity [Abstract]

COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS

COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table provides details about the reclassifications out of AOCL:

	Three Months Ended June 30,				Location in the consolidated statements of operations
	2021		2020
Gains on net investment hedges
FX forwards	$	1	$	—	Other non-operating income, net
Income tax effect of item above	(1)		—		Provision for income taxes
Total net gains on net investment hedges	—		—
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income	(3)		(1)		Other non-operating income, net
Settlement charge	(7)		—		Other non-operating income, net
Total before income taxes	(10)		(1)
Income tax effect of items above	2		—		Provision for income taxes
Total pension and other retirement benefits	(8)		(1)
Total net losses included in Net Income attributable to reclassifications out of AOCL	$	(8)	$	(1)

	Six Months Ended June 30,				Location in the consolidated statements of operations
Losses on cash flow hedges	2021		2020
Interest rate contract	$	(1)	$	(1)	Other non-operating income, net
Income tax effect of item above	—		—		Provision for income taxes
Total net losses on cash flow hedges	(1)		(1)
Gains on net investment hedges
FX forwards	2		—		Other non-operating income, net
Income tax effect of item above	(1)		—		Provision for income taxes
Total net gains on net investment hedges	1		—
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income	(6)		(3)		Other non-operating income, net
Settlement charge	(7)		—		Other non-operating income, net
Total before income taxes	(13)		(3)
Income tax effect of items above	3		1		Provision for income taxes
Total pension and other retirement benefits	(10)		(2)
Total net losses included in Net Income attributable to reclassifications out of AOCL	$	(10)	$	(3)

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

	Three Months Ended June 30,
	2021										2020
Gains/(Losses)	Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total		Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total
Balance March 31,	$	(116)	$	(48)	$	(188)	$	(88)	$	(440)	$	(92)	$	(35)	$	(570)	$	143	$	(554)
Other comprehensive income/(loss) before reclassifications	—		—		36		(29)		7		7		(14)		91		(73)		11
Amounts reclassified from AOCL	8		—		—		—		8		1		—		—		—		1
Other comprehensive income/(loss)	8		—		36		(29)		15		8		(14)		91		(73)		12
Balance June 30,	$	(108)	$	(48)	$	(152)	$	(117)	$	(425)	$	(84)	$	(49)	$	(479)	$	70	$	(542)

	Six Months Ended June 30,
	2021										2020
Gains/(Losses)	Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total		Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total
Balance December 31,	$	(118)	$	(49)	$	(45)	$	(220)	$	(432)	$	(92)	$	—	$	(401)	$	54	$	(439)
Other comprehensive income/(loss) before reclassifications	—		—		(107)		104		(3)		6		(50)		(78)		16		(106)
Amounts reclassified from AOCL	10		1		—		(1)		10		2		1		—		—		3
Other comprehensive income/(loss)	10		1		(107)		103		7		8		(49)		(78)		16		(103)
Balance June 30,	$	(108)	$	(48)	$	(152)	$	(117)	$	(425)	$	(84)	$	(49)	$	(479)	$	70	$	(542)

XML

PENSION AND OTHER RETIREMENT BENEFITS

6 Months Ended

Jun. 30, 2021

Retirement Benefits [Abstract]

PENSION AND OTHER RETIREMENT BENEFITS

PENSION AND OTHER RETIREMENT BENEFITS

Moody’s maintains funded and unfunded noncontributory DBPPs. The DBPPs provide defined benefits using a cash balance formula based on years of service and career average salary for its employees 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”. The U.S. retirement healthcare plans and the U.S. retirement life insurance plans are collectively referred to herein as the “Other Retirement Plans.” The non-U.S. defined benefit pension plans are immaterial.

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 formulas.

The components of net periodic benefit expense related to the Retirement Plans and Other Retirement Plans are as follows:

	Three Months Ended June 30,
	Pension Plans				Other Retirement Plans
	2021		2020		2021		2020
Components of net periodic expense
Service cost	$	5	$	3	$	1	$	1
Interest cost	3		5		1		—
Expected return on plan assets	(6)		(5)		—		—
Amortization of net actuarial loss from earlier periods	3		1		—		—
Loss on settlement of pension obligation	7		—		—		—
Net periodic expense	$	12	$	4	$	2	$	1

	Six Months Ended June 30,
	Pension Plans				Other Retirement Plans
	2021		2020		2021		2020
Components of net periodic expense
Service cost	$	10	$	8	$	2	$	2
Interest cost	7		9		1		—
Expected return on plan assets	(13)		(10)		—		—
Amortization of net actuarial loss from earlier periods	5		3		—		—
Loss on settlement of pension obligation	7		—		—		—
Net periodic expense	$	16	$	10	$	3	$	2

The Company made contributions of $41 million related to its unfunded U.S. DBPPs during the six months ended June 30, 2021. Actual and anticipated contributions in 2021 for the remaining plans are not expected to be material.

XML

INDEBTEDNESS

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

INDEBTEDNESS

INDEBTEDNESS

The Company’s debt is recorded at its carrying amount, which represents the issuance amount plus or minus any issuance premium or discount, except for the 2012 Senior Notes due 2022, the 2017 Senior Notes due 2023, the 2017 Senior Notes due 2028 and the 2020 Senior Notes due 2025, which are 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:

June 30, 2021
Notes Payable:	Principal Amount		Fair Value of Interest Rate Swaps (1)		Unamortized (Discount) Premium		Unamortized Debt Issuance Costs		Carrying Value
4.50% 2012 Senior Notes, due 2022	$	500	$	10	$	—	$	—	$	510
4.875% 2013 Senior Notes, due 2024	500		—		(1)		(1)		498
5.25% 2014 Senior Notes, due 2044	600		—		3		(5)		598
1.75% 2015 Senior Notes, due 2027	593		—		—		(2)		591
2.625% 2017 Senior Notes, due 2023	500		9		—		(1)		508
3.25% 2017 Senior Notes, due 2028	500		18		(4)		(3)		511
4.25% 2018 Senior Notes, due 2029	400		—		(2)		(3)		395
4.875% 2018 Senior Notes, due 2048	400		—		(6)		(4)		390
0.950% 2019 Senior Notes, due 2030	889		—		(3)		(6)		880
3.75% 2020 Senior Notes, due 2025	700		(5)		(1)		(4)		690
3.25% 2020 Senior Notes, due 2050	300		—		(4)		(3)		293
2.55% 2020 Senior Notes, due 2060	500		—		(4)		(5)		491
Total long-term debt	$	6,382	$	32	$	(22)	$	(37)	$	6,355

December 31, 2020
Notes Payable:	Principal Amount		Fair Value of Interest Rate Swaps (1)		Unamortized (Discount) Premium		Unamortized Debt Issuance Costs		Carrying Value
4.50% 2012 Senior Notes, due 2022	$	500	$	14	$	(1)	$	(1)	$	512
4.875% 2013 Senior Notes, due 2024	500		—		(1)		(1)		498
5.25% 2014 Senior Notes, due 2044	600		—		3		(5)		598
1.75% 2015 Senior Notes, due 2027	612		—		—		(2)		610
2.625% 2017 Senior Notes, due 2023	500		12		—		(2)		510
3.25% 2017 Senior Notes, due 2028	500		31		(4)		(3)		524
4.25% 2018 Senior Notes, due 2029	400		—		(3)		(3)		394
4.875% 2018 Senior Notes, due 2048	400		—		(6)		(4)		390
0.950% 2019 Senior Notes, due 2030	918		—		(3)		(6)		909
3.75% 2020 Senior Notes, due 2025	700		(1)		(1)		(5)		693
3.25% 2020 Senior Notes, due 2050	300		—		(4)		(3)		293
2.55% 2020 Senior Notes, due 2060	500		—		(4)		(5)		491
Total long-term debt	$	6,430	$	56	$	(24)	$	(40)	$	6,422

(1) The fair value of interest rate swaps in the table above represents the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged debt.

Notes Payable

At June 30, 2021, the Company was in compliance with all covenants contained within all of the debt agreements. All 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 June 30, 2021, there were no such cross defaults.

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

Year Ending December 31,	2012 Senior Notes due 2022		2013 Senior Notes due 2024		2014 Senior Notes due 2044		2015 Senior Notes due 2027		2017 Senior Notes due 2023		2017 Senior Notes due 2028		2018 Senior Notes due 2029		2018 Senior Notes due 2048		2019 Senior Notes due 2030		2020 Senior Notes due 2025		2020 Senior Notes due 2050		2020 Senior Notes due 2060		Total
2021 (After June 30,)	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2022	500		—		—		—		—		—		—		—		—		—		—		—		500
2023	—		—		—		—		500		—		—		—		—		—		—		—		500
2024	—		500		—		—		—		—		—		—		—		—		—		—		500
2025	—		—		—		—		—		—		—		—		—		700		—		—		700
Thereafter	—		—		600		593		—		500		400		400		889		—		300		500		4,182
Total	$	500	$	500	$	600	$	593	$	500	$	500	$	400	$	400	$	889	$	700	$	300	$	500	$	6,382

Interest expense, net

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Income	$	1	$	3	$	4	$	7
Expense on borrowings	(41)		(48)		(82)		(79)
Income (expense) on UTPs and other tax related liabilities(2)	(5)		(10)		30		(18)
Net periodic pension costs - interest component	(4)		(5)		(8)		(10)
Interest expense, net	$	(49)	$	(60)	$	(56)	$	(100)
Interest paid(1)	$	13	$	23	$	86	$	72

(1) Interest paid includes net settlements on interest rate swaps more fully discussed in Note 9.

(2) Income (expense) on UTPs and other tax related liabilities for the six months ended June 30, 2021 includes a $40 million benefit relating to the reversal of tax-related interest accruals pursuant to the resolution of tax matters.

The fair value and carrying value of the Company’s debt as of June 30, 2021 and December 31, 2020 are as follows:

	June 30, 2021				December 31, 2020
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
4.50% 2012 Senior Notes, due 2022	$	510	$	522	$	512	$	530
4.875% 2013 Senior Notes, due 2024	498		551		498		562
5.25% 2014 Senior Notes, due 2044	598		808		598		828
1.75% 2015 Senior Notes, due 2027	591		643		610		674
2.625% 2017 Senior Notes, due 2023	508		516		510		522
3.25% 2017 Senior Notes, due 2028	511		550		524		561
4.25% 2018 Senior Notes, due 2029	395		465		394		480
4.875% 2018 Senior Notes, due 2048	390		527		390		544
0.950% 2019 Senior Notes, due 2030	880		919		909		974
3.75% 2020 Senior Notes, due 2025	690		768		693		785
3.25% 2020 Senior Notes, due 2050	293		313		293		329
2.55% 2020 Senior Notes, due 2060	491		442		491		467
Total	$	6,355	$	7,024	$	6,422	$	7,256

The fair value of the Company’s long-term debt is estimated based on quoted market prices for similar instruments. Accordingly, the inputs used to estimate the fair value of the Company’s long-term debt are classified as Level 2 inputs within the fair value hierarchy.

XML

LEASES

6 Months Ended

Jun. 30, 2021

Leases [Abstract]

LEASES

LEASES

The Company has operating leases, substantially all of which relate to the lease of office space. The Company’s leases which are classified as finance leases are not material to the consolidated financial statements. Certain of the Company’s leases include options to renew, with renewal terms that can extend the lease term from one year to 20 years at the Company’s discretion.

The following table presents the components of the Company’s lease cost:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Operating lease cost	$	23	$	24	$	47	$	48
Sublease income	(1)		(1)		(2)		(2)
Variable lease cost	5		5		10		10
Total lease cost	$	27	$	28	$	55	$	56

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cash paid for amounts included in the measurement of operating lease liabilities	$	28	$	27	$	56	$	53
Right-of-use assets obtained in exchange for new operating lease liabilities	$	2	$	11	$	6	$	20

	June 30, 2021		June 30, 2020
Weighted-average remaining lease term	5.6 years		6.5 years
Weighted-average discount rate applied to operating leases	3.6	%	3.6	%

The following table presents a maturity analysis of the future minimum lease payments included within the Company’s operating lease liabilities at June 30, 2021:

Year Ending December 31,	Operating Leases
2021 (After June 30)	$	55
2022	100
2023	94
2024	85
2025	77
After 2025	117
Total lease payments (undiscounted)	528
Less: Interest	50
Present value of lease liabilities:	$	478
Lease liabilities - current	$	92
Lease liabilities - noncurrent	$	386

XML

CONTINGENCIES

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

CONTINGENCIES

CONTINGENCIES

Given the nature of the Company's activities, Moody’s and its subsidiaries are subject to legal and tax proceedings, governmental, regulatory and legislative investigations, subpoenas and other inquiries, and claims and litigation by governmental and private parties that are based on ratings assigned by MIS or that are otherwise incidental to the Company’s business. Moody’s and MIS also are subject to periodic reviews, inspections, examinations and investigations by regulators in the U.S. and other jurisdictions, any of which may result in claims, legal proceedings, assessments, fines, penalties or restrictions on business activities. Moody’s also is subject to ongoing tax audits as addressed in Note 5 to the consolidated financial statements.

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

In view of the inherent difficulty of assessing the potential outcome of legal proceedings, governmental, regulatory and legislative investigations and inquiries, claims and litigation and similar matters and contingencies, particularly when the claimants seek large or indeterminate damages or assert novel legal theories or the matters involve a large number of parties, the Company often cannot predict what the eventual outcome of the pending matters will be or the timing of any resolution of such matters. The Company also may be unable to predict the impact (if any) that any such matters may have on how its business is conducted, on its competitive position or on its financial position, results of operations or cash flows. As the process to resolve any pending matters progresses, management will continue to review the latest information available and assess its ability to predict the outcome of such matters and the effects, if any, on its operations and financial condition and to accrue for and disclose such matters as and when required. However, because such matters are inherently unpredictable and unfavorable developments or resolutions can occur, the ultimate outcome of such matters, including the amount of any loss, may differ from those estimates.

XML

SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

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

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 ESG research, data and assessments.

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 two LOBs - RD&A and ERS.

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. Additionally, 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. These intersegment fees are generally based on the market value of the products and services being transferred between the segments.

Overhead expenses include costs such as rent and occupancy, information technology and support staff such as finance, human resources and legal. Such costs and corporate expenses that exclusively benefit one segment are fully charged to that segment.

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

“Eliminations” in the following table represent intersegment revenue/expense. Moody’s does not report the Company’s assets by reportable segment, as this metric is not used by the chief operating decision maker 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, operating income and Adjusted 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.

	Three Months Ended June 30,
	2021								2020
	MIS		MA		Eliminations		Consolidated		MIS		MA		Eliminations		Consolidated
Revenue	$	1,022	$	575	$	(44)	$	1,553	$	973	$	499	$	(37)	$	1,435
Total Expenses	362		434		(44)		752		369		393		(37)		725
Operating income	660		141		—		801		604		106		—		710
Add:
Depreciation and amortization	18		42		—		60		19		39		—		58
Restructuring	—		—		—		—		—		(2)		—		(2)
Adjusted Operating Income	$	678	$	183	$	—	$	861	$	623	$	143	$	—	$	766

	Six Months Ended June 30,
	2021								2020
	MIS		MA		Eliminations		Consolidated		MIS		MA		Eliminations		Consolidated
Revenue	$	2,098	$	1,141	$	(86)	$	3,153	$	1,804	$	997	$	(76)	$	2,725
Total Expenses	728		857		(86)		1,499		712		787		(76)		1,423
Operating income	1,370		284		—		1,654		1,092		210		—		1,302
Add:
Depreciation and amortization	36		83		—		119		35		72		—		107
Restructuring	—		2		—		2		(1)		(2)		—		(3)
Loss pursuant to the divestiture of MAKS	—		—		—		—		—		9		—		9
Adjusted Operating Income	$	1,406	$	369	$	—	$	1,775	$	1,126	$	289	$	—	$	1,415

Consolidated Revenue Information by Geographic Area

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
United States	$	831	$	837	$	1,716	$	1,551
Non-U.S.:
EMEA	481		373		959		736
Asia-Pacific	155		144		311		280
Americas	86		81		167		158
Total Non-U.S.	722		598		1,437		1,174
Total	$	1,553	$	1,435	$	3,153	$	2,725

XML

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2021
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTOn July 27, 2021, the Board approved the declaration of a quarterly dividend of $0.62 per share of Moody’s common stock, payable on September 10, 2021 to shareholders of record at the close of business on August 20, 2021.

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Goodwill

Goodwill

Moody’s evaluates its goodwill for impairment at the reporting unit level, defined as an operating segment (i.e., MIS and MA), 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.

Prior to the second quarter of 2021, MA's reporting unit structure consisted of five reporting units (Content, ERS, MALS, Bureau van Dijk and Reis). Pursuant to a strategic reorganization in the MA segment which was completed in the second quarter of 2021, MA's reporting unit structure has been reorganized into two reporting units. MA’s two new reporting units generally consist of: i) businesses offering data and data-driven analytical solutions; and ii) risk-management software, workflow and CRE solutions.

The Company performed qualitative assessments of the reporting units impacted by the reorganization immediately before and after the reorganization became effective. These qualitative assessments resulted in the Company determining that it was not more likely than not that the fair value of any reporting unit was less than its carrying amount.

The Company will perform a quantitative assessment on the new reporting units as of July 31, 2021, the date of the Company’s annual goodwill impairment assessment, which will provide new baseline valuations under the new reporting unit structure.

XML

REVENUES (Tables)

6 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
MIS:
Corporate finance (CFG)
Investment-grade	$	102	$	291	$	236	$	435
High-yield	124		99		265		174
Bank loans	157		43		337		132
Other accounts (1)	167		139		317		284
Total CFG	550		572		1,155		1,025
Financial institutions (FIG)
Banking	101		88		210		174
Insurance	33		44		76		74
Managed investments	13		8		21		14
Other accounts	3		2		5		5
Total FIG	150		142		312		267
Public, project and infrastructure finance (PPIF)
Public finance / sovereign	63		64		130		121
Project and infrastructure	67		69		143		121
Total PPIF	130		133		273		242
Structured finance (SFG)
Asset-backed securities	33		23		59		45
RMBS	31		23		58		50
CMBS	23		13		47		30
Structured credit	53		21		91		50
Other accounts	—		1		1		2
Total SFG	140		81		256		177
Total ratings revenue	970		928		1,996		1,711
MIS Other	10		10		20		21
Total external revenue	980		938		2,016		1,732
Intersegment revenue	42		35		82		72
Total MIS	1,022		973		2,098		1,804
MA:
Research, data and analytics (RD&A)	435		366		854		724
Enterprise risk solutions (ERS)	138		131		283		269
Total external revenue	573		497		1,137		993
Intersegment revenue	2		2		4		4
Total MA	575		499		1,141		997
Eliminations	(44)		(37)		(86)		(76)
Total MCO	$	1,553	$	1,435	$	3,153	$	2,725

(1) Other includes: recurring monitoring fees of a rated debt obligation and/or entities that issue such obligations as well as fees from programs such as commercial paper, medium term notes, and ICRA corporate finance revenue.

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

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
	U.S.		Non-U.S		Total		U.S.		Non-U.S		Total
MIS:
Corporate finance	$	345	$	205	$	550	$	413	$	159	$	572
Financial institutions	69		81		150		70		72		142
Public, project and infrastructure finance	79		51		130		87		46		133
Structured finance	88		52		140		45		36		81
Total ratings revenue	581		389		970		615		313		928
MIS Other	1		9		10		1		9		10
Total MIS	582		398		980		616		322		938
MA:
Research, data and analytics	190		245		435		167		199		366
Enterprise risk solutions	59		79		138		54		77		131
Total MA	249		324		573		221		276		497
Total MCO	$	831	$	722	$	1,553	$	837	$	598	$	1,435

	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
	U.S.		Non-U.S		Total		U.S.		Non-U.S		Total
MIS:
Corporate finance	$	759	$	396	$	1,155	$	727	$	298	$	1,025
Financial institutions	155		157		312		130		137		267
Public, project and infrastructure finance	157		116		273		155		87		242
Structured finance	156		100		256		106		71		177
Total ratings revenue	1,227		769		1,996		1,118		593		1,711
MIS Other	2		18		20		1		20		21
Total MIS	1,229		787		2,016		1,119		613		1,732
MA:
Research, data and analytics	373		481		854		325		399		724
Enterprise risk solutions	114		169		283		107		162		269
Total MA	487		650		1,137		432		561		993
Total MCO	$	1,716	$	1,437	$	3,153	$	1,551	$	1,174	$	2,725

The following tables summarize the split between transaction and recurring revenue. In the MIS segment, excluding MIS Other, transaction revenue represents the initial rating of a new debt issuance as well as other one-time fees while recurring revenue represents the 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. In MIS Other, transaction revenue represents revenue from professional services and recurring revenue represents subscription-based revenues. In the MA segment, recurring revenue represents subscription-based revenues and software maintenance revenue. Transaction revenue in MA represents perpetual software license fees and revenue from software implementation services, risk management advisory projects, and training and certification services.

	Three Months Ended June 30,
	2021										2020
	Transaction				Recurring			Total			Transaction			Recurring			Total
Corporate Finance	$	427			$	123		$	550		$	457		$	115		$	572
	78		%		22		%	100		%	80		%	20		%	100		%
Financial Institutions	$	79			$	71		$	150		$	76		$	66		$	142
	53		%		47		%	100		%	54		%	46		%	100		%
Public, Project and Infrastructure Finance	$	88			$	42		$	130		$	96		$	37		$	133
	68		%		32		%	100		%	72		%	28		%	100		%
Structured Finance	$	92			$	48		$	140		$	35		$	46		$	81
	66		%		34		%	100		%	43		%	57		%	100		%
MIS Other	$	—			$	10		$	10		$	—		$	10		$	10
	—		%		100		%	100		%	—		%	100		%	100		%
Total MIS	$	686			$	294		$	980		$	664		$	274		$	938
	70		%		30		%	100		%	71		%	29		%	100		%
Research, data and analytics	$	22			$	413		$	435		$	16		$	350		$	366
	5		%		95		%	100		%	4		%	96		%	100		%
Enterprise risk solutions	$	16			$	122		$	138		$	26		$	105		$	131
	12		%		88		%	100		%	20		%	80		%	100		%
Total MA	$	38		(1)	$	535		$	573		$	42		$	455		$	497
	7		%		93		%	100		%	8		%	92		%	100		%
Total Moody's Corporation	$	724			$	829		$	1,553		$	706		$	729		$	1,435
	47		%		53		%	100		%	49		%	51		%	100		%

	Six Months Ended June 30,
	2021										2020
	Transaction				Recurring			Total			Transaction			Recurring			Total
Corporate Finance	$	914			$	241		$	1,155		$	795		$	230		$	1,025
	79		%		21		%	100		%	78		%	22		%	100		%
Financial Institutions	$	169			$	143		$	312		$	136		$	131		$	267
	54		%		46		%	100		%	51		%	49		%	100		%
Public, Project and Infrastructure Finance	$	188			$	85		$	273		$	165		$	77		$	242
	69		%		31		%	100		%	68		%	32		%	100		%
Structured Finance	$	158			$	98		$	256		$	85		$	92		$	177
	62		%		38		%	100		%	48		%	52		%	100		%
MIS Other	$	2			$	18		$	20		$	2		$	19		$	21
	10		%		90		%	100		%	10		%	90		%	100		%
Total MIS	$	1,431			$	585		$	2,016		$	1,183		$	549		$	1,732
	71		%		29		%	100		%	68		%	32		%	100		%
Research, data and analytics	$	42			$	812		$	854		$	34		$	690		$	724
	5		%		95		%	100		%	5		%	95		%	100		%
Enterprise risk solutions	$	39			$	244		$	283		$	58		$	211		$	269
	14		%		86		%	100		%	22		%	78		%	100		%
Total MA	$	81		(1)	$	1,056		$	1,137		$	92		$	901		$	993
	7		%		93		%	100		%	9		%	91		%	100		%
Total Moody's Corporation	$	1,512			$	1,641		$	3,153		$	1,275		$	1,450		$	2,725
	48		%		52		%	100		%	47		%	53		%	100		%

(1) Revenue from software implementation services and risk management advisory projects, while classified by management as transactional revenue, is recognized over time under the Revenue Accounting Standard (please also refer to the following table).

The following table presents the timing of revenue recognition:

	Three Months Ended June 30, 2021						Six Months Ended June 30, 2021
	MIS		MA		Total		MIS		MA		Total
Revenue recognized at a point in time	$	686	$	20	$	706	$	1,431	$	49	$	1,480
Revenue recognized over time	294		553		847		585		1,088		1,673
Total	$	980	$	573	$	1,553	$	2,016	$	1,137	$	3,153

	Three Months Ended June 30, 2020						Six Months Ended June 30, 2020
	MIS		MA		Total		MIS		MA		Total
Revenue recognized at a point in time	$	664	$	20	$	684	$	1,183	$	59	$	1,242
Revenue recognized over time	274		477		751		549		934		1,483
Total	$	938	$	497	$	1,435	$	1,732	$	993	$	2,725

Company's Reportable Segment Revenues Disaggregated by Segment and Geographic Region

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
MIS:
U.S.	$	582	$	616	$	1,229	$	1,119
Non-U.S.:
EMEA	248		183		496		354
Asia-Pacific	100		90		197		171
Americas	50		49		94		88
Total Non-U.S.	398		322		787		613
Total MIS	980		938		2,016		1,732
MA:
U.S.	249		221		487		432
Non-U.S.:
EMEA	233		190		463		382
Asia-Pacific	55		54		114		109
Americas	36		32		73		70
Total Non-U.S.	324		276		650		561
Total MA	573		497		1,137		993
Total MCO	$	1,553	$	1,435	$	3,153	$	2,725

Schedule of Changes in the Deferred Revenue Balances

Significant changes in the deferred revenue balances during the three and six months ended June 30, 2021 and 2020 are as follows:

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
	MIS		MA		Total		MIS		MA		Total
Balance at March 31,	$	388	$	940	$	1,328	$	379	$	843	$	1,222
Changes in deferred revenue
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(119)		(338)		(457)		(115)		(341)		(456)
Increases due to amounts billable excluding amounts recognized as revenue during the period	98		262		360		100		234		334
Effect of exchange rate changes	1		3		4		1		4		5
Total changes in deferred revenue	(20)		(73)		(93)		(14)		(103)		(117)
Balance at June 30,	$	368	$	867	$	1,235	$	365	$	740	$	1,105

	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
	MIS		MA		Total		MIS		MA			Total
Balance at December 31,	$	313	$	874	$	1,187	$	322	$	840		$	1,162
Changes in deferred revenue
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(162)		(565)		(727)		(167)		(578)		(1)	(745)
Increases due to amounts billable excluding amounts recognized as revenue during the period	219		555		774		213		478		(1)	691
Increases due to acquisitions during the period	—		4		4		—		20			20
Effect of exchange rate changes	(2)		(1)		(3)		(3)		(20)			(23)
Total changes in deferred revenue	55		(7)		48		43		(100)			(57)
Balance at June 30,	$	368	$	867	$	1,235	$	365	$	740		$	1,105
Deferred revenue - current	$	279	$	863	$	1,142	$	265	$	736		1,001
Deferred revenue - noncurrent	$	89	$	4	$	93	$	100	$	4		104

(1) The 2020 amounts were both reduced by $99 million from amounts previously disclosed in the Form 10-Q for the six months ended June 30, 2020.

XML

STOCK-BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock-Based Compensation Cost and Associated Tax Benefit

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,
	2021		2020		2021		2020
Stock-based compensation cost	$	41	$	35	$	86	$	72
Tax benefit	$	10	$	7	$	21	$	14

Weighted Average Assumptions used in Determining Fair Value for Options Granted

The following weighted average assumptions were used in determining the fair value for options granted in 2021:

Expected dividend yield	0.89	%
Expected stock volatility	28	%
Risk-free interest rate	0.81 %
Expected holding period	5.6 years

Stock Option Exercises and Restricted Stock Vesting

The following tables summarize information relating to stock option exercises and restricted stock vesting:

	Six Months Ended June 30,
	2021		2020
Exercise of stock options:
Proceeds from stock option exercises	$	16	$	23
Aggregate intrinsic value	$	35	$	74
Tax benefit realized upon exercise	$	8	$	18
Number of shares exercised	0.2		0.4
Vesting of restricted stock:
Fair value of shares vested	$	187	$	193
Tax benefit realized upon vesting	$	43	$	45
Number of shares vested	0.7		0.8
Vesting of performance-based restricted stock:
Fair value of shares vested	$	28	$	70
Tax benefit realized upon vesting	$	7	$	17
Number of shares vested	0.1		0.3

XML

INCOME TAXES (Tables)

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes Paid

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

	Six Months Ended June 30,
	2021		2020
Income taxes paid	$	327	$	111

XML

WEIGHTED AVERAGE SHARES OUTSTANDING (Tables)

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Reconciliation of Basic to Diluted Shares Outstanding

Below is a reconciliation of basic to diluted shares outstanding:

	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
Basic	186.7	187.7	187.0	187.6
Dilutive effect of shares issuable under stock-based compensation plans	1.2	1.3	1.2	1.7
Diluted	187.9	189.0	188.2	189.3
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above	0.2	0.3	0.3	0.3

XML

CASH EQUIVALENTS AND INVESTMENTS (Tables)

6 Months Ended

Jun. 30, 2021

Cash and Cash Equivalents [Abstract]

Schedule of Cash and Cash Equivalents and Investments

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

	As of June 30, 2021
							Balance sheet location
	Cost		Gains/(Losses)		Fair Value		Cash and cash equivalents		Short-term investments		Other assets
Certificates of deposit and money market deposit accounts (1)	$	1,481	$	—	$	1,481	$	1,370	$	88	$	23
Mutual funds	$	53	$	7	$	60	$	—	$	—	$	60

	As of December 31, 2020
							Balance sheet location
	Cost		Gains/(Losses)		Fair Value		Cash and cash equivalents		Short-term investments		Other assets
Certificates of deposit and money market deposit accounts (1)	$	1,430	$	—	$	1,430	$	1,325	$	99	$	6
Mutual funds	$	54	$	6	$	60	$	—	$	—	$	60

(1) Consists of time deposits and money market deposit accounts. The remaining contractual maturities for the certificates of deposits classified as short-term investments were one month to 12 months at both June 30, 2021 and December 31, 2020. The remaining contractual maturities for the certificates of deposits classified in other assets are 13 months to 23 months at both June 30, 2021 and December 31, 2020. Time deposits with a maturity of less than 90 days at time of purchase are classified as cash and cash equivalents.

XML

ACQUISITIONS (Tables)

6 Months Ended

Jun. 30, 2021

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions, by Acquisition

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

Cash paid at closing	$	138
Additional consideration paid to sellers in 2021 (1)	1
Total consideration	$	139

(1) Represents additional consideration paid to the sellers following finalization of customary post-closing completion adjustments.

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

Cash paid at closing	$	700
Additional consideration paid to sellers in 2020 (1)	2
Total consideration	$	702

(1) Represents additional consideration paid to the sellers following finalization of customary post-closing completion adjustments.

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

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

Current assets			$	7
Intangible assets:
Database (10 year useful life)	$	38
Customer relationships (18 year useful life)	9
Product technology (8 year useful life)	9
Trade name (5 year useful life)	1
Total intangible assets (11 year weighted average useful life)			57
Goodwill			95
Other assets			2
Liabilities:
Accounts payable and accrued liabilities	$	(1)
Deferred revenue	(4)
Deferred tax liabilities	(15)
Other liabilities	(2)
Total liabilities			(22)
Net assets acquired			$	139

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

Current assets			$	24
Intangible assets:
Customer relationships (25 year useful life)	$	174
Database (10 year useful life)	86
Product technology (4 year useful life)	17
Trade name (3 year useful life)	3
Total intangible assets (19 year weighted average life)			280
Goodwill			494
Other assets			2
Liabilities:
Accounts payable and accrued liabilities	$	(5)
Deferred revenue	(20)
Deferred tax liabilities	(71)
Other liabilities	(2)
Total liabilities			(98)
Net assets acquired			$	702

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

6 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The following table summarizes the Company’s interest rate swaps designated as fair value hedges:

		Notional Amount
Hedged Item	Nature of Swap	As of June 30, 2021		As of December 31, 2020		Floating Interest Rate
2012 Senior Notes due 2022	Pay Floating/Receive Fixed	$	330	$	330	3-month USD LIBOR
2017 Senior Notes due 2023	Pay Floating/Receive Fixed	$	250	$	250	3-month USD LIBOR
2017 Senior Notes due 2028	Pay Floating/Receive Fixed	$	500	$	500	3-month USD LIBOR
2020 Senior Notes due 2025	Pay Floating/Receive Fixed	$	300	$	300	6-month USD LIBOR
Total		$	1,380	$	1,380

The following table provides information on the cross-currency swaps designated as net investment hedges under ASC Topic 815:

June 30, 2021
	Pay			Receive
Nature of Swap	Notional Amount		Weighted Average Interest Rate	Notional Amount		Weighted Average Interest Rate
Pay Fixed/Receive Fixed	€	1,060	2.15%	$	1,220	4.45%
Pay Floating/Receive Floating	959		Based on 3-month EURIBOR	1,080		Based on 3-month USD LIBOR
Total	€	2,019		$	2,300

December 31, 2020
	Pay			Receive
Nature of Swap	Notional Amount		Weighted Average Interest Rate	Notional Amount		Weighted Average Interest Rate
Pay Fixed/Receive Fixed	€	1,079	1.43%	$	1,220	3.96%
Pay Floating/Receive Floating	959		Based on 3-month EURIBOR	1,080		Based on 3-month USD LIBOR
Total	€	2,038		$	2,300

Gains and Losses on Derivatives Designated as Hedging Instruments

The following table summarizes the impact to the statements of operations of the Company’s interest rate swaps designated as fair value hedges:

Total amounts of financial statement line item presented in the statements of operations in which the effects of fair value hedges are recorded		Amount of income/(loss) recognized in the consolidated statements of operations
		Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020
Interest expense, net		$	(49)	$	(60)	$	(56)	$	(100)
Descriptions	Location on Consolidated Statements of Operations
Net interest settlements and accruals on interest rate swaps	Interest expense, net	$	6	$	5	$	11	$	8
Fair value changes on interest rate swaps	Interest expense, net	$	—	$	2	$	(24)	$	60
Fair value changes on hedged debt	Interest expense, net	$	—	$	(2)	$	24	$	(60)

Schedule of Net Investment Hedges, Notional Amount That Will Be Settled At Expiry

As of June 30, 2021 these hedges will expire and the notional amounts will be settled as follows unless terminated early at the discretion of the Company:

Years Ending December 31,
2021 (After June 30,)	€	—
2022	€	438
2023	€	442
2024	€	443
2026	€	450
2027	€	246
Total	€	2,019

Summary of Notional Amounts of Outstanding Foreign Exchange Forwards

The following table summarizes the notional amounts of the Company's outstanding forward contracts that were designated as net investment hedges:

Notional amount of net investment hedges	June 30, 2021				December 31, 2020
	Sell		Buy		Sell		Buy
Contract to sell EUR for USD	€	597	$	728	€	524	$	627
Contract to sell GBP for EUR	£	134	€	155	£	134	€	148

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

	June 30, 2021				December 31, 2020
Notional amount of currency pair:	Sell		Buy		Sell		Buy
Contracts to sell USD for GBP	$	424	£	301	$	295	£	222
Contracts to sell USD for Japanese yen	$	15	¥	1,600	$	15	¥	1,600
Contracts to sell USD for Canadian dollars	$	105	C$	129	$	107	C$	140
Contracts to sell USD for Singapore dollars	$	59	S$	79	$	59	S$	79
Contracts to sell USD for euros	$	549	€	450	$	447	€	376
Contracts to sell Euros for GBP	€	135	£	116	€	135	£	121
Contracts to sell USD for Russian ruble	$	13	₽	1,000	$	13	₽	1,000
Contracts to sell USD for Indian rupee	$	18	₹	1,350	$	18	₹	1,350

NOTE: € = euro, £ = British pound, $ = U.S. dollar, ¥ = Japanese yen, C$ = Canadian dollar, S$= Singapore dollars, ₽= Russian ruble, ₹= Indian rupee

Amount of Gain/(Loss) Recognized in AOCI on Derivative Net Investment Hedging Relationships (Effectiveness Portion)

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

Derivative and Non-Derivative Instruments in Net Investment Hedging Relationships	Amount of Gain/(Loss) Recognized in AOCL on Derivative, net of Tax				Amount of Gain/(Loss) Reclassified from AOCL into Income, net of Tax				Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
	Three Months Ended June 30,				Three Months Ended June 30,				Three Months Ended June 30,
	2021		2020		2021		2020		2021		2020
FX forward contracts	$	—	$	—	$	—	$	—	$	—	$	—
Cross currency swaps	(18)		(49)		—		—		9		14
Long-term debt	(10)		(24)		—		—		—		—
Total net investment hedges	$	(28)	$	(73)	$	—	$	—	$	9	$	14
Derivatives in Cash Flow Hedging Relationships
Interest rate contracts	—		(14)		—		—		—		—
Total cash flow hedges	—		(14)		—		—		—		—
Total	$	(28)	$	(87)	$	—	$	—	$	9	$	14

Derivative and Non-Derivative Instruments in Net Investment Hedging Relationships	Amount of Gain/(Loss) Recognized in AOCL on Derivative, net of Tax				Amount of Gain/(Loss) Reclassified from AOCL into Income, net of Tax				Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
	Six Months Ended June 30,				Six Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020		2021		2020
FX forward contracts	$	16	$	—	$	1	$	—	$	—	$	—
Cross currency swaps	54		17		—		—		19		30
Long-term debt	35		(1)		—		—		—		—
Total net investment hedges	$	105	$	16	$	1	$	—	$	19	$	30
Derivatives in Cash Flow Hedging Relationships
Interest rate contracts	—		(50)		(1)		(1)		—		—
Total cash flow hedges	—		(50)		(1)		(1)		—		—
Total	$	105	$	(34)	$	—	$	(1)	$	19	$	30

Components of Accumulated Other Comprehensive Income

The cumulative amount of net investment hedge and cash flow hedge gains (losses) remaining in AOCL is as follows:

	Cumulative Gains/(Losses), net of tax
	June 30, 2021		December 31, 2020
Net investment hedges
Cross currency swaps	$	(70)	$	(124)
FX forwards	27		12
Long-term debt	(73)		(108)
Total net investment hedges	$	(116)	$	(220)
Cash flow hedges
Interest rate contracts	$	(50)	$	(51)
Cross currency swaps	2		2
Total cash flow hedges	(48)		(49)
Total net loss in AOCL	$	(164)	$	(269)

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

	Three Months Ended June 30,
	2021										2020
Gains/(Losses)	Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total		Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total
Balance March 31,	$	(116)	$	(48)	$	(188)	$	(88)	$	(440)	$	(92)	$	(35)	$	(570)	$	143	$	(554)
Other comprehensive income/(loss) before reclassifications	—		—		36		(29)		7		7		(14)		91		(73)		11
Amounts reclassified from AOCL	8		—		—		—		8		1		—		—		—		1
Other comprehensive income/(loss)	8		—		36		(29)		15		8		(14)		91		(73)		12
Balance June 30,	$	(108)	$	(48)	$	(152)	$	(117)	$	(425)	$	(84)	$	(49)	$	(479)	$	70	$	(542)

	Six Months Ended June 30,
	2021										2020
Gains/(Losses)	Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total		Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total
Balance December 31,	$	(118)	$	(49)	$	(45)	$	(220)	$	(432)	$	(92)	$	—	$	(401)	$	54	$	(439)
Other comprehensive income/(loss) before reclassifications	—		—		(107)		104		(3)		6		(50)		(78)		16		(106)
Amounts reclassified from AOCL	10		1		—		(1)		10		2		1		—		—		3
Other comprehensive income/(loss)	10		1		(107)		103		7		8		(49)		(78)		16		(103)
Balance June 30,	$	(108)	$	(48)	$	(152)	$	(117)	$	(425)	$	(84)	$	(49)	$	(479)	$	70	$	(542)

Gains and Losses Recognized in Consolidated Statement of Operations on Derivatives Not Designated as Hedging instruments

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

Derivatives not designated as accounting hedges	Location on Consolidated Statements of Operations	Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020
Foreign exchange forwards	Other non-operating income, net	$	(1)	$	5	$	(7)	$	(35)

Fair Value of Derivative Instruments

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

	Derivative and Non-Derivative Instruments
	Balance Sheet Location	June 30, 2021		December 31, 2020
Assets:
Derivatives designated as accounting hedges:
Cross-currency swaps designated as net investment hedges	Other assets	$	7	$	—
Interest rate swaps designated as fair value hedges	Other assets	37		57
FX forwards designated as net investment hedges	Other current assets	19		—
Total derivatives designated as accounting hedges		63		57
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities	Other current assets	3		31
Total assets		$	66	$	88
Liabilities:
Derivatives designated as accounting hedges:
FX forwards designated as net investment hedges	Accounts payable and accrued liabilities	$	1	$	16
Cross-currency swaps designated as net investment hedges	Accounts payable and accrued liabilities	—		23
Cross-currency swaps designated as net investment hedges	Other liabilities	80		144
Interest rate swaps designated as fair value hedges	Other liabilities	5		1
Total derivatives designated as accounting hedges		86		184
Non-derivatives designated as accounting hedges:
Long-term debt designated as net investment hedge	Long-term debt	1,482		1,530
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities	Accounts payable and accrued liabilities	26		2
Total liabilities		$	1,594	$	1,716

XML

GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Activity in Goodwill

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

	Six Months Ended June 30, 2021
	MIS						MA						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	$	311	$	—	$	311	$	4,257	$	(12)	$	4,245	$	4,568	$	(12)	$	4,556
Additions/ adjustments (1)	—		—		—		95		—		95		95		—		95
Foreign currency translation adjustments	1		—		1		(62)		—		(62)		(61)		—		(61)
Ending balance	$	312	$	—	$	312	$	4,290	$	(12)	$	4,278	$	4,602	$	(12)	$	4,590

	Year Ended December 31, 2020
	MIS						MA						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	$	315	$	—	$	315	$	3,419	$	(12)	$	3,407	$	3,734	$	(12)	$	3,722
Additions/ adjustments (2)	(2)		—		(2)		628		—		628		626		—		626
Foreign currency translation adjustments	(2)		—		(2)		210		—		210		208		—		208
Ending balance	$	311	$	—	$	311	$	4,257	$	(12)	$	4,245	$	4,568	$	(12)	$	4,556

(1) The 2021 additions/adjustments for the MA segment in the table above relate to the acquisition of Cortera.

(2) The 2020 additions/adjustments for the MA segment in the table above relate to the acquisitions of RDC, AM, ZMFS, and Catylist.

Acquired Intangible Assets and Related Amortization

Acquired intangible assets and related amortization consisted of:

	June 30, 2021		December 31, 2020
Customer relationships	$	1,611	$	1,623
Accumulated amortization	(347)		(313)
Net customer relationships	1,264		1,310
Software/product technology	442		441
Accumulated amortization	(195)		(177)
Net software/product technology	247		264
Database	181		144
Accumulated amortization	(37)		(29)
Net database	144		115
Trade names	160		161
Accumulated amortization	(42)		(38)
Net trade names	118		123
Other (1)	54		55
Accumulated amortization	(43)		(43)
Net other	11		12
Total acquired intangible assets, net	$	1,784	$	1,824

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

Amortization Expense Relating to Acquired Intangible Assets

Amortization expense relating to acquired intangible assets is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Amortization expense	$	36	$	31	$	71	$	59

Estimated Future Amortization Expense for Acquired Intangible Assets Subject to Amortization

Estimated future amortization expense for acquired intangible assets subject to amortization is as follows:

Year Ending December 31,
2021 (After June 30,)	$	63
2022	133
2023	129
2024	125
2025	121
Thereafter	1,213
Total estimated future amortization	$	1,784

XML

RESTRUCTURING (Tables)

6 Months Ended

Jun. 30, 2021

Restructuring and Related Activities [Abstract]

Restructuring Expenses Included in Consolidated Statements of Operations

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
2020 MA Strategic Reorganization Restructuring Program	$	—	$	—	$	2	$	—

Changes to the Restructuring Liability

Changes to the restructuring liability for the aforementioned restructuring program during the first six months of 2021 were as follows:

	Employee Termination Costs
Balance as of December 31, 2020	$	18
2020 MA Strategic Reorganization Restructuring Program:
Cost incurred and adjustments	2
Cash payments and adjustments	(8)
Balance as of June 30, 2021	$	12
Cumulative expense incurred to date
2020 MA Strategic Reorganization Restructuring Program:	$	20

XML

FAIR VALUE (Tables)

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Financial Instruments Carried at Fair Value on Recurring Basis

The table below presents information about items that are carried at fair value at June 30, 2021 and December 31, 2020:

	Fair value Measurement as of June 30, 2021
Description	Balance		Level 1		Level 2
Assets:
Derivatives (1)	$	66	$	—	$	66
Mutual funds	60		60		—
Total	$	126	$	60	$	66
Liabilities:
Derivatives (1)	$	112	$	—	$	112
Total	$	112	$	—	$	112

	Fair value Measurement as of December 31, 2020
Description	Balance		Level 1		Level 2
Assets:
Derivatives (1)	$	88	$	—	$	88
Mutual funds	60		60		—
Total	$	148	$	60	$	88
Liabilities:
Derivatives (1)	$	186	$	—	$	186
Total	$	186	$	—	$	186

(1) Represents FX forward contracts, interest rate swaps and cross-currency swaps as more fully described in Note 9 to the condensed consolidated financial statements.

XML

OTHER BALANCE SHEET AND STATEMENT OF OPERATIONS INFORMATION (Tables)

6 Months Ended

Jun. 30, 2021

Other Balance Sheet And Statement Of Operations Information [Abstract]

Additional Details Related to Certain Balance Sheet Captions

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

	June 30, 2021		December 31, 2020
Other current assets:
Prepaid taxes	$	125	$	94
Prepaid expenses	78		91
Capitalized costs to obtain and fulfill sales contracts	92		93
Foreign exchange forwards on certain assets and liabilities	3		31
Derivative instruments designated as accounting hedges	19		—
Other	62		74
Total other current assets	$	379	$	383
Other assets:
Investments in non-consolidated affiliates	$	151	$	135
Deposits for real-estate leases	14		19
Indemnification assets related to acquisitions	15		15
Mutual funds and fixed deposits	83		66
Company owned life insurance (at contract value)	36		17
Costs to obtain sales contracts	142		134
Derivative instruments designated as accounting hedges	44		57
Pension and other retirement employee benefits	19		21
Other	52		51
Total other assets	$	556	$	515
Accounts payable and accrued liabilities:
Salaries and benefits	$	149	$	197
Incentive compensation	134		226
Customer credits, advanced payments and advanced billings	60		42
Dividends	5		11
Professional service fees	60		53
Interest accrued on debt	72		82
Accounts payable	18		39
Income taxes	108		128
Pension and other retirement employee benefits	46		45
Accrued royalties	23		19
Foreign exchange forwards on certain assets and liabilities	26		2
Restructuring liability	12		18
Derivative instruments designated as accounting hedges	1		39
Other	102		138
Total accounts payable and accrued liabilities	$	816	$	1,039

	June 30, 2021		December 31, 2020
Other liabilities:
Pension and other retirement employee benefits	$	211	$	244
Interest accrued on UTPs	75		113
MAKS indemnification provisions	33		33
Income tax liability - non-current portion	18		18
Derivative instruments designated as accounting hedges	85		145
Other	38		37
Total other liabilities	$	460	$	590

Other Non-Operating

The following table summarizes the components of other non-operating income (expense):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
FX gain (loss)	$	2	$	(8)	$	—	$	5
Net periodic pension costs - other components (1)	(3)		4		1		7
Income/(loss) from investments in non-consolidated affiliates	1		3		9		—
Other	6		17		12		16
Total	$	6	$	16	$	22	$	28
(1) The amounts for the three and six months ended June 30, 2021 include a $7 million loss related to a settlement of pension obligations

XML

COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

6 Months Ended

Jun. 30, 2021

Equity [Abstract]

Reclassifications out of AOCI

The following table provides details about the reclassifications out of AOCL:

	Three Months Ended June 30,				Location in the consolidated statements of operations
	2021		2020
Gains on net investment hedges
FX forwards	$	1	$	—	Other non-operating income, net
Income tax effect of item above	(1)		—		Provision for income taxes
Total net gains on net investment hedges	—		—
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income	(3)		(1)		Other non-operating income, net
Settlement charge	(7)		—		Other non-operating income, net
Total before income taxes	(10)		(1)
Income tax effect of items above	2		—		Provision for income taxes
Total pension and other retirement benefits	(8)		(1)
Total net losses included in Net Income attributable to reclassifications out of AOCL	$	(8)	$	(1)

	Six Months Ended June 30,				Location in the consolidated statements of operations
Losses on cash flow hedges	2021		2020
Interest rate contract	$	(1)	$	(1)	Other non-operating income, net
Income tax effect of item above	—		—		Provision for income taxes
Total net losses on cash flow hedges	(1)		(1)
Gains on net investment hedges
FX forwards	2		—		Other non-operating income, net
Income tax effect of item above	(1)		—		Provision for income taxes
Total net gains on net investment hedges	1		—
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income	(6)		(3)		Other non-operating income, net
Settlement charge	(7)		—		Other non-operating income, net
Total before income taxes	(13)		(3)
Income tax effect of items above	3		1		Provision for income taxes
Total pension and other retirement benefits	(10)		(2)
Total net losses included in Net Income attributable to reclassifications out of AOCL	$	(10)	$	(3)

Components of Accumulated Other Comprehensive Income

The cumulative amount of net investment hedge and cash flow hedge gains (losses) remaining in AOCL is as follows:

	Cumulative Gains/(Losses), net of tax
	June 30, 2021		December 31, 2020
Net investment hedges
Cross currency swaps	$	(70)	$	(124)
FX forwards	27		12
Long-term debt	(73)		(108)
Total net investment hedges	$	(116)	$	(220)
Cash flow hedges
Interest rate contracts	$	(50)	$	(51)
Cross currency swaps	2		2
Total cash flow hedges	(48)		(49)
Total net loss in AOCL	$	(164)	$	(269)

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

	Three Months Ended June 30,
	2021										2020
Gains/(Losses)	Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total		Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total
Balance March 31,	$	(116)	$	(48)	$	(188)	$	(88)	$	(440)	$	(92)	$	(35)	$	(570)	$	143	$	(554)
Other comprehensive income/(loss) before reclassifications	—		—		36		(29)		7		7		(14)		91		(73)		11
Amounts reclassified from AOCL	8		—		—		—		8		1		—		—		—		1
Other comprehensive income/(loss)	8		—		36		(29)		15		8		(14)		91		(73)		12
Balance June 30,	$	(108)	$	(48)	$	(152)	$	(117)	$	(425)	$	(84)	$	(49)	$	(479)	$	70	$	(542)

	Six Months Ended June 30,
	2021										2020
Gains/(Losses)	Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total		Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total
Balance December 31,	$	(118)	$	(49)	$	(45)	$	(220)	$	(432)	$	(92)	$	—	$	(401)	$	54	$	(439)
Other comprehensive income/(loss) before reclassifications	—		—		(107)		104		(3)		6		(50)		(78)		16		(106)
Amounts reclassified from AOCL	10		1		—		(1)		10		2		1		—		—		3
Other comprehensive income/(loss)	10		1		(107)		103		7		8		(49)		(78)		16		(103)
Balance June 30,	$	(108)	$	(48)	$	(152)	$	(117)	$	(425)	$	(84)	$	(49)	$	(479)	$	70	$	(542)

XML

PENSION AND OTHER RETIREMENT BENEFITS (Tables)

6 Months Ended

Jun. 30, 2021

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Expense Related to Post-Retirement Plans

The components of net periodic benefit expense related to the Retirement Plans and Other Retirement Plans are as follows:

	Three Months Ended June 30,
	Pension Plans				Other Retirement Plans
	2021		2020		2021		2020
Components of net periodic expense
Service cost	$	5	$	3	$	1	$	1
Interest cost	3		5		1		—
Expected return on plan assets	(6)		(5)		—		—
Amortization of net actuarial loss from earlier periods	3		1		—		—
Loss on settlement of pension obligation	7		—		—		—
Net periodic expense	$	12	$	4	$	2	$	1

	Six Months Ended June 30,
	Pension Plans				Other Retirement Plans
	2021		2020		2021		2020
Components of net periodic expense
Service cost	$	10	$	8	$	2	$	2
Interest cost	7		9		1		—
Expected return on plan assets	(13)		(10)		—		—
Amortization of net actuarial loss from earlier periods	5		3		—		—
Loss on settlement of pension obligation	7		—		—		—
Net periodic expense	$	16	$	10	$	3	$	2

XML

INDEBTEDNESS (Tables)

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Summary of Total Indebtedness

The following table summarizes total indebtedness:

June 30, 2021
Notes Payable:	Principal Amount		Fair Value of Interest Rate Swaps (1)		Unamortized (Discount) Premium		Unamortized Debt Issuance Costs		Carrying Value
4.50% 2012 Senior Notes, due 2022	$	500	$	10	$	—	$	—	$	510
4.875% 2013 Senior Notes, due 2024	500		—		(1)		(1)		498
5.25% 2014 Senior Notes, due 2044	600		—		3		(5)		598
1.75% 2015 Senior Notes, due 2027	593		—		—		(2)		591
2.625% 2017 Senior Notes, due 2023	500		9		—		(1)		508
3.25% 2017 Senior Notes, due 2028	500		18		(4)		(3)		511
4.25% 2018 Senior Notes, due 2029	400		—		(2)		(3)		395
4.875% 2018 Senior Notes, due 2048	400		—		(6)		(4)		390
0.950% 2019 Senior Notes, due 2030	889		—		(3)		(6)		880
3.75% 2020 Senior Notes, due 2025	700		(5)		(1)		(4)		690
3.25% 2020 Senior Notes, due 2050	300		—		(4)		(3)		293
2.55% 2020 Senior Notes, due 2060	500		—		(4)		(5)		491
Total long-term debt	$	6,382	$	32	$	(22)	$	(37)	$	6,355

December 31, 2020
Notes Payable:	Principal Amount		Fair Value of Interest Rate Swaps (1)		Unamortized (Discount) Premium		Unamortized Debt Issuance Costs		Carrying Value
4.50% 2012 Senior Notes, due 2022	$	500	$	14	$	(1)	$	(1)	$	512
4.875% 2013 Senior Notes, due 2024	500		—		(1)		(1)		498
5.25% 2014 Senior Notes, due 2044	600		—		3		(5)		598
1.75% 2015 Senior Notes, due 2027	612		—		—		(2)		610
2.625% 2017 Senior Notes, due 2023	500		12		—		(2)		510
3.25% 2017 Senior Notes, due 2028	500		31		(4)		(3)		524
4.25% 2018 Senior Notes, due 2029	400		—		(3)		(3)		394
4.875% 2018 Senior Notes, due 2048	400		—		(6)		(4)		390
0.950% 2019 Senior Notes, due 2030	918		—		(3)		(6)		909
3.75% 2020 Senior Notes, due 2025	700		(1)		(1)		(5)		693
3.25% 2020 Senior Notes, due 2050	300		—		(4)		(3)		293
2.55% 2020 Senior Notes, due 2060	500		—		(4)		(5)		491
Total long-term debt	$	6,430	$	56	$	(24)	$	(40)	$	6,422

(1) The fair value of interest rate swaps in the table above represents the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged debt.

Principal Payments Due on Long-Term Borrowings

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

Year Ending December 31,	2012 Senior Notes due 2022		2013 Senior Notes due 2024		2014 Senior Notes due 2044		2015 Senior Notes due 2027		2017 Senior Notes due 2023		2017 Senior Notes due 2028		2018 Senior Notes due 2029		2018 Senior Notes due 2048		2019 Senior Notes due 2030		2020 Senior Notes due 2025		2020 Senior Notes due 2050		2020 Senior Notes due 2060		Total
2021 (After June 30,)	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2022	500		—		—		—		—		—		—		—		—		—		—		—		500
2023	—		—		—		—		500		—		—		—		—		—		—		—		500
2024	—		500		—		—		—		—		—		—		—		—		—		—		500
2025	—		—		—		—		—		—		—		—		—		700		—		—		700
Thereafter	—		—		600		593		—		500		400		400		889		—		300		500		4,182
Total	$	500	$	500	$	600	$	593	$	500	$	500	$	400	$	400	$	889	$	700	$	300	$	500	$	6,382

Summary of Components of Interest as Presented in Consolidated Statements of Operations

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Income	$	1	$	3	$	4	$	7
Expense on borrowings	(41)		(48)		(82)		(79)
Income (expense) on UTPs and other tax related liabilities(2)	(5)		(10)		30		(18)
Net periodic pension costs - interest component	(4)		(5)		(8)		(10)
Interest expense, net	$	(49)	$	(60)	$	(56)	$	(100)
Interest paid(1)	$	13	$	23	$	86	$	72

(1) Interest paid includes net settlements on interest rate swaps more fully discussed in Note 9.

(2) Income (expense) on UTPs and other tax related liabilities for the six months ended June 30, 2021 includes a $40 million benefit relating to the reversal of tax-related interest accruals pursuant to the resolution of tax matters.

Fair Value and Carrying Value of Long-Term Debt

The fair value and carrying value of the Company’s debt as of June 30, 2021 and December 31, 2020 are as follows:

	June 30, 2021				December 31, 2020
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
4.50% 2012 Senior Notes, due 2022	$	510	$	522	$	512	$	530
4.875% 2013 Senior Notes, due 2024	498		551		498		562
5.25% 2014 Senior Notes, due 2044	598		808		598		828
1.75% 2015 Senior Notes, due 2027	591		643		610		674
2.625% 2017 Senior Notes, due 2023	508		516		510		522
3.25% 2017 Senior Notes, due 2028	511		550		524		561
4.25% 2018 Senior Notes, due 2029	395		465		394		480
4.875% 2018 Senior Notes, due 2048	390		527		390		544
0.950% 2019 Senior Notes, due 2030	880		919		909		974
3.75% 2020 Senior Notes, due 2025	690		768		693		785
3.25% 2020 Senior Notes, due 2050	293		313		293		329
2.55% 2020 Senior Notes, due 2060	491		442		491		467
Total	$	6,355	$	7,024	$	6,422	$	7,256

XML

LEASES (Tables)

6 Months Ended

Jun. 30, 2021

Leases [Abstract]

Components of Lease Cost

The following table presents the components of the Company’s lease cost:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Operating lease cost	$	23	$	24	$	47	$	48
Sublease income	(1)		(1)		(2)		(2)
Variable lease cost	5		5		10		10
Total lease cost	$	27	$	28	$	55	$	56

Schedule of Operating Leases Information

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cash paid for amounts included in the measurement of operating lease liabilities	$	28	$	27	$	56	$	53
Right-of-use assets obtained in exchange for new operating lease liabilities	$	2	$	11	$	6	$	20

	June 30, 2021		June 30, 2020
Weighted-average remaining lease term	5.6 years		6.5 years
Weighted-average discount rate applied to operating leases	3.6	%	3.6	%

Lessee, Operating Lease, Liability, Maturity

The following table presents a maturity analysis of the future minimum lease payments included within the Company’s operating lease liabilities at June 30, 2021:

Year Ending December 31,	Operating Leases
2021 (After June 30)	$	55
2022	100
2023	94
2024	85
2025	77
After 2025	117
Total lease payments (undiscounted)	528
Less: Interest	50
Present value of lease liabilities:	$	478
Lease liabilities - current	$	92
Lease liabilities - noncurrent	$	386

XML

SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2021

Segment Reporting Information [Line Items]

Financial Information by Segment

The table below shows revenue, operating income and Adjusted 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.

	Three Months Ended June 30,
	2021								2020
	MIS		MA		Eliminations		Consolidated		MIS		MA		Eliminations		Consolidated
Revenue	$	1,022	$	575	$	(44)	$	1,553	$	973	$	499	$	(37)	$	1,435
Total Expenses	362		434		(44)		752		369		393		(37)		725
Operating income	660		141		—		801		604		106		—		710
Add:
Depreciation and amortization	18		42		—		60		19		39		—		58
Restructuring	—		—		—		—		—		(2)		—		(2)
Adjusted Operating Income	$	678	$	183	$	—	$	861	$	623	$	143	$	—	$	766

	Six Months Ended June 30,
	2021								2020
	MIS		MA		Eliminations		Consolidated		MIS		MA		Eliminations		Consolidated
Revenue	$	2,098	$	1,141	$	(86)	$	3,153	$	1,804	$	997	$	(76)	$	2,725
Total Expenses	728		857		(86)		1,499		712		787		(76)		1,423
Operating income	1,370		284		—		1,654		1,092		210		—		1,302
Add:
Depreciation and amortization	36		83		—		119		35		72		—		107
Restructuring	—		2		—		2		(1)		(2)		—		(3)
Loss pursuant to the divestiture of MAKS	—		—		—		—		—		9		—		9
Adjusted Operating Income	$	1,406	$	369	$	—	$	1,775	$	1,126	$	289	$	—	$	1,415

Company's Reportable Segment Revenues Disaggregated by Segment and Geographic Region

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
MIS:
U.S.	$	582	$	616	$	1,229	$	1,119
Non-U.S.:
EMEA	248		183		496		354
Asia-Pacific	100		90		197		171
Americas	50		49		94		88
Total Non-U.S.	398		322		787		613
Total MIS	980		938		2,016		1,732
MA:
U.S.	249		221		487		432
Non-U.S.:
EMEA	233		190		463		382
Asia-Pacific	55		54		114		109
Americas	36		32		73		70
Total Non-U.S.	324		276		650		561
Total MA	573		497		1,137		993
Total MCO	$	1,553	$	1,435	$	3,153	$	2,725

Operating Segments

Segment Reporting Information [Line Items]

Company's Reportable Segment Revenues Disaggregated by Segment and Geographic Region

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
United States	$	831	$	837	$	1,716	$	1,551
Non-U.S.:
EMEA	481		373		959		736
Asia-Pacific	155		144		311		280
Americas	86		81		167		158
Total Non-U.S.	722		598		1,437		1,174
Total	$	1,553	$	1,435	$	3,153	$	2,725

XML

Description of Business and Basis of Presentation - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2021 segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of reportable segments	2

XML

Summary of Significant Accounting Policies (Details) - reporting_unit	3 Months Ended
	Jun. 30, 2021	Mar. 31, 2021
MA
Segment Reporting Information [Line Items]
Number of reporting units	2	5

XML

Revenues - Revenue by Category (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation of Revenue [Line Items]
Revenue	$ 1,553	$ 1,435	$ 3,153	$ 2,725
Eliminations
Disaggregation of Revenue [Line Items]
Revenue	(44)	(37)	(86)	(76)
MIS
Disaggregation of Revenue [Line Items]
Revenue	980	938	2,016	1,732
MIS | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	1,022	973	2,098	1,804
MIS | Eliminations
Disaggregation of Revenue [Line Items]
Revenue	42	35	82	72
MIS | Corporate Finance (CFG)
Disaggregation of Revenue [Line Items]
Revenue	550	572	1,155	1,025
MIS | Corporate Finance (CFG) | Investment-grade
Disaggregation of Revenue [Line Items]
Revenue	102	291	236	435
MIS | Corporate Finance (CFG) | High-yield
Disaggregation of Revenue [Line Items]
Revenue	124	99	265	174
MIS | Corporate Finance (CFG) | Bank loans
Disaggregation of Revenue [Line Items]
Revenue	157	43	337	132
MIS | Corporate Finance (CFG) | Other accounts
Disaggregation of Revenue [Line Items]
Revenue	167	139	317	284
MIS | Financial Institutions (FIG)
Disaggregation of Revenue [Line Items]
Revenue	150	142	312	267
MIS | Financial Institutions (FIG) | Other accounts
Disaggregation of Revenue [Line Items]
Revenue	3	2	5	5
MIS | Financial Institutions (FIG) | Banking
Disaggregation of Revenue [Line Items]
Revenue	101	88	210	174
MIS | Financial Institutions (FIG) | Insurance
Disaggregation of Revenue [Line Items]
Revenue	33	44	76	74
MIS | Financial Institutions (FIG) | Managed investments
Disaggregation of Revenue [Line Items]
Revenue	13	8	21	14
MIS | Public, Project And Infrastructure Finance (PPIF)
Disaggregation of Revenue [Line Items]
Revenue	130	133	273	242
MIS | Public, Project And Infrastructure Finance (PPIF) | Public finance / sovereign
Disaggregation of Revenue [Line Items]
Revenue	63	64	130	121
MIS | Public, Project And Infrastructure Finance (PPIF) | Project and infrastructure
Disaggregation of Revenue [Line Items]
Revenue	67	69	143	121
MIS | Structured Finance (SFG)
Disaggregation of Revenue [Line Items]
Revenue	140	81	256	177
MIS | Structured Finance (SFG) | Other accounts
Disaggregation of Revenue [Line Items]
Revenue	0	1	1	2
MIS | Structured Finance (SFG) | Asset-backed securities
Disaggregation of Revenue [Line Items]
Revenue	33	23	59	45
MIS | Structured Finance (SFG) | RMBS
Disaggregation of Revenue [Line Items]
Revenue	31	23	58	50
MIS | Structured Finance (SFG) | CMBS
Disaggregation of Revenue [Line Items]
Revenue	23	13	47	30
MIS | Structured Finance (SFG) | Structured credit
Disaggregation of Revenue [Line Items]
Revenue	53	21	91	50
MIS | Rating Revenue
Disaggregation of Revenue [Line Items]
Revenue	970	928	1,996	1,711
MIS | MIS Other
Disaggregation of Revenue [Line Items]
Revenue	10	10	20	21
MA
Disaggregation of Revenue [Line Items]
Revenue	573	497	1,137	993
MA | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue	575	499	1,141	997
MA | Eliminations
Disaggregation of Revenue [Line Items]
Revenue	2	2	4	4
MA | Research, Data And Analytics (RD&A)
Disaggregation of Revenue [Line Items]
Revenue	435	366	854	724
MA | Enterprise Risk Solutions (ERS)
Disaggregation of Revenue [Line Items]
Revenue	$ 138	$ 131	$ 283	$ 269

XML

Revenues - Revenues Disaggregated by Line of Business and Geographical Area (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation of Revenue [Line Items]
Revenue	$ 1,553	$ 1,435	$ 3,153	$ 2,725
United States
Disaggregation of Revenue [Line Items]
Revenue	831	837	1,716	1,551
Non-U.S.
Disaggregation of Revenue [Line Items]
Revenue	722	598	1,437	1,174
MIS
Disaggregation of Revenue [Line Items]
Revenue	980	938	2,016	1,732
MIS | United States
Disaggregation of Revenue [Line Items]
Revenue	582	616	1,229	1,119
MIS | Non-U.S.
Disaggregation of Revenue [Line Items]
Revenue	398	322	787	613
MIS | Corporate Finance (CFG)
Disaggregation of Revenue [Line Items]
Revenue	550	572	1,155	1,025
MIS | Corporate Finance (CFG) | United States
Disaggregation of Revenue [Line Items]
Revenue	345	413	759	727
MIS | Corporate Finance (CFG) | Non-U.S.
Disaggregation of Revenue [Line Items]
Revenue	205	159	396	298
MIS | Financial Institutions (FIG)
Disaggregation of Revenue [Line Items]
Revenue	150	142	312	267
MIS | Financial Institutions (FIG) | United States
Disaggregation of Revenue [Line Items]
Revenue	69	70	155	130
MIS | Financial Institutions (FIG) | Non-U.S.
Disaggregation of Revenue [Line Items]
Revenue	81	72	157	137
MIS | Public, Project And Infrastructure Finance (PPIF)
Disaggregation of Revenue [Line Items]
Revenue	130	133	273	242
MIS | Public, Project And Infrastructure Finance (PPIF) | United States
Disaggregation of Revenue [Line Items]
Revenue	79	87	157	155
MIS | Public, Project And Infrastructure Finance (PPIF) | Non-U.S.
Disaggregation of Revenue [Line Items]
Revenue	51	46	116	87
MIS | Structured Finance (SFG)
Disaggregation of Revenue [Line Items]
Revenue	140	81	256	177
MIS | Structured Finance (SFG) | United States
Disaggregation of Revenue [Line Items]
Revenue	88	45	156	106
MIS | Structured Finance (SFG) | Non-U.S.
Disaggregation of Revenue [Line Items]
Revenue	52	36	100	71
MIS | Rating Revenue
Disaggregation of Revenue [Line Items]
Revenue	970	928	1,996	1,711
MIS | Rating Revenue | United States
Disaggregation of Revenue [Line Items]
Revenue	581	615	1,227	1,118
MIS | Rating Revenue | Non-U.S.
Disaggregation of Revenue [Line Items]
Revenue	389	313	769	593
MIS | MIS Other
Disaggregation of Revenue [Line Items]
Revenue	10	10	20	21
MIS | MIS Other | United States
Disaggregation of Revenue [Line Items]
Revenue	1	1	2	1
MIS | MIS Other | Non-U.S.
Disaggregation of Revenue [Line Items]
Revenue	9	9	18	20
MA
Disaggregation of Revenue [Line Items]
Revenue	573	497	1,137	993
MA | United States
Disaggregation of Revenue [Line Items]
Revenue	249	221	487	432
MA | Non-U.S.
Disaggregation of Revenue [Line Items]
Revenue	324	276	650	561
MA | Research, Data And Analytics (RD&A)
Disaggregation of Revenue [Line Items]
Revenue	435	366	854	724
MA | Research, Data And Analytics (RD&A) | United States
Disaggregation of Revenue [Line Items]
Revenue	190	167	373	325
MA | Research, Data And Analytics (RD&A) | Non-U.S.
Disaggregation of Revenue [Line Items]
Revenue	245	199	481	399
MA | Enterprise Risk Solutions (ERS)
Disaggregation of Revenue [Line Items]
Revenue	138	131	283	269
MA | Enterprise Risk Solutions (ERS) | United States
Disaggregation of Revenue [Line Items]
Revenue	59	54	114	107
MA | Enterprise Risk Solutions (ERS) | Non-U.S.
Disaggregation of Revenue [Line Items]
Revenue	$ 79	$ 77	$ 169	$ 162

XML

Revenues - Consolidated Revenue Information by Geographic Area (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Segment Reporting Information [Line Items]
Revenue	$ 1,553	$ 1,435	$ 3,153	$ 2,725
MIS
Segment Reporting Information [Line Items]
Revenue	980	938	2,016	1,732
MA
Segment Reporting Information [Line Items]
Revenue	573	497	1,137	993
United States
Segment Reporting Information [Line Items]
Revenue	831	837	1,716	1,551
United States | MIS
Segment Reporting Information [Line Items]
Revenue	582	616	1,229	1,119
United States | MA
Segment Reporting Information [Line Items]
Revenue	249	221	487	432
Non-U.S.
Segment Reporting Information [Line Items]
Revenue	722	598	1,437	1,174
Non-U.S. | MIS
Segment Reporting Information [Line Items]
Revenue	398	322	787	613
Non-U.S. | MA
Segment Reporting Information [Line Items]
Revenue	324	276	650	561
EMEA
Segment Reporting Information [Line Items]
Revenue	481	373	959	736
EMEA | MIS
Segment Reporting Information [Line Items]
Revenue	248	183	496	354
EMEA | MA
Segment Reporting Information [Line Items]
Revenue	233	190	463	382
Asia-Pacific
Segment Reporting Information [Line Items]
Revenue	155	144	311	280
Asia-Pacific | MIS
Segment Reporting Information [Line Items]
Revenue	100	90	197	171
Asia-Pacific | MA
Segment Reporting Information [Line Items]
Revenue	55	54	114	109
Americas
Segment Reporting Information [Line Items]
Revenue	86	81	167	158
Americas | MIS
Segment Reporting Information [Line Items]
Revenue	50	49	94	88
Americas | MA
Segment Reporting Information [Line Items]
Revenue	$ 36	$ 32	$ 73	$ 70

XML

Revenues - Transaction and Relationship Revenue (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation of Revenue [Line Items]
Revenue	$ 1,553	$ 1,435	$ 3,153	$ 2,725
Percentage of Revenues	100.00%	100.00%	100.00%	100.00%
MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 980	$ 938	$ 2,016	$ 1,732
Percentage of Revenues	100.00%	100.00%	100.00%	100.00%
MA
Disaggregation of Revenue [Line Items]
Revenue	$ 573	$ 497	$ 1,137	$ 993
Percentage of Revenues	100.00%	100.00%	100.00%	100.00%
Corporate Finance (CFG) | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 550	$ 572	$ 1,155	$ 1,025
Percentage of Revenues	100.00%	100.00%	100.00%	100.00%
Financial Institutions (FIG) | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 150	$ 142	$ 312	$ 267
Percentage of Revenues	100.00%	100.00%	100.00%	100.00%
Public, Project And Infrastructure Finance (PPIF) | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 130	$ 133	$ 273	$ 242
Percentage of Revenues	100.00%	100.00%	100.00%	100.00%
Structured Finance (SFG) | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 140	$ 81	$ 256	$ 177
Percentage of Revenues	100.00%	100.00%	100.00%	100.00%
MIS Other | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 10	$ 10	$ 20	$ 21
Percentage of Revenues	100.00%	100.00%	100.00%	100.00%
Research, Data And Analytics (RD&A) | MA
Disaggregation of Revenue [Line Items]
Revenue	$ 435	$ 366	$ 854	$ 724
Percentage of Revenues	100.00%	100.00%	100.00%	100.00%
Enterprise Risk Solutions (ERS) | MA
Disaggregation of Revenue [Line Items]
Revenue	$ 138	$ 131	$ 283	$ 269
Percentage of Revenues	100.00%	100.00%	100.00%	100.00%
Transaction Revenue
Disaggregation of Revenue [Line Items]
Revenue	$ 724	$ 706	$ 1,512	$ 1,275
Percentage of Revenues	47.00%	49.00%	48.00%	47.00%
Transaction Revenue | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 686	$ 664	$ 1,431	$ 1,183
Percentage of Revenues	70.00%	71.00%	71.00%	68.00%
Transaction Revenue | MA
Disaggregation of Revenue [Line Items]
Revenue	$ 38	$ 42	$ 81	$ 92
Percentage of Revenues	7.00%	8.00%	7.00%	9.00%
Transaction Revenue | Corporate Finance (CFG) | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 427	$ 457	$ 914	$ 795
Percentage of Revenues	78.00%	80.00%	79.00%	78.00%
Transaction Revenue | Financial Institutions (FIG) | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 79	$ 76	$ 169	$ 136
Percentage of Revenues	53.00%	54.00%	54.00%	51.00%
Transaction Revenue | Public, Project And Infrastructure Finance (PPIF) | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 88	$ 96	$ 188	$ 165
Percentage of Revenues	68.00%	72.00%	69.00%	68.00%
Transaction Revenue | Structured Finance (SFG) | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 92	$ 35	$ 158	$ 85
Percentage of Revenues	66.00%	43.00%	62.00%	48.00%
Transaction Revenue | MIS Other | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 0	$ 0	$ 2	$ 2
Percentage of Revenues	0.00%	0.00%	10.00%	10.00%
Transaction Revenue | Research, Data And Analytics (RD&A) | MA
Disaggregation of Revenue [Line Items]
Revenue	$ 22	$ 16	$ 42	$ 34
Percentage of Revenues	5.00%	4.00%	5.00%	5.00%
Transaction Revenue | Enterprise Risk Solutions (ERS) | MA
Disaggregation of Revenue [Line Items]
Revenue	$ 16	$ 26	$ 39	$ 58
Percentage of Revenues	12.00%	20.00%	14.00%	22.00%
Recurring Revenue
Disaggregation of Revenue [Line Items]
Revenue	$ 829	$ 729	$ 1,641	$ 1,450
Percentage of Revenues	53.00%	51.00%	52.00%	53.00%
Recurring Revenue | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 294	$ 274	$ 585	$ 549
Percentage of Revenues	30.00%	29.00%	29.00%	32.00%
Recurring Revenue | MA
Disaggregation of Revenue [Line Items]
Revenue	$ 535	$ 455	$ 1,056	$ 901
Percentage of Revenues	93.00%	92.00%	93.00%	91.00%
Recurring Revenue | Corporate Finance (CFG) | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 123	$ 115	$ 241	$ 230
Percentage of Revenues	22.00%	20.00%	21.00%	22.00%
Recurring Revenue | Financial Institutions (FIG) | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 71	$ 66	$ 143	$ 131
Percentage of Revenues	47.00%	46.00%	46.00%	49.00%
Recurring Revenue | Public, Project And Infrastructure Finance (PPIF) | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 42	$ 37	$ 85	$ 77
Percentage of Revenues	32.00%	28.00%	31.00%	32.00%
Recurring Revenue | Structured Finance (SFG) | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 48	$ 46	$ 98	$ 92
Percentage of Revenues	34.00%	57.00%	38.00%	52.00%
Recurring Revenue | MIS Other | MIS
Disaggregation of Revenue [Line Items]
Revenue	$ 10	$ 10	$ 18	$ 19
Percentage of Revenues	100.00%	100.00%	90.00%	90.00%
Recurring Revenue | Research, Data And Analytics (RD&A) | MA
Disaggregation of Revenue [Line Items]
Revenue	$ 413	$ 350	$ 812	$ 690
Percentage of Revenues	95.00%	96.00%	95.00%	95.00%
Recurring Revenue | Enterprise Risk Solutions (ERS) | MA
Disaggregation of Revenue [Line Items]
Revenue	$ 122	$ 105	$ 244	$ 211
Percentage of Revenues	88.00%	80.00%	86.00%	78.00%

XML

Revenues - Revenue Recognition Timing (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation of Revenue [Line Items]
Revenue recognized	$ 1,553	$ 1,435	$ 3,153	$ 2,725
At Point in Time
Disaggregation of Revenue [Line Items]
Revenue recognized	706	684	1,480	1,242
Over Time
Disaggregation of Revenue [Line Items]
Revenue recognized	847	751	1,673	1,483
MIS
Disaggregation of Revenue [Line Items]
Revenue recognized	980	938	2,016	1,732
MIS | At Point in Time
Disaggregation of Revenue [Line Items]
Revenue recognized	686	664	1,431	1,183
MIS | Over Time
Disaggregation of Revenue [Line Items]
Revenue recognized	294	274	585	549
MA
Disaggregation of Revenue [Line Items]
Revenue recognized	573	497	1,137	993
MA | At Point in Time
Disaggregation of Revenue [Line Items]
Revenue recognized	20	20	49	59
MA | Over Time
Disaggregation of Revenue [Line Items]
Revenue recognized	$ 553	$ 477	$ 1,088	$ 934

XML

Revenues - Additional Information (Detail) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
MIS
Disaggregation of Revenue [Line Items]
Unbilled Receivables	$ 429	$ 361
MA
Disaggregation of Revenue [Line Items]
Unbilled Receivables	$ 95	$ 98

XML

Revenues - Schedule of Changes in the Deferred Revenue Balances (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Change in Contract with Customer, Liability [Abstract]
Beginning Balance	$ 1,328	$ 1,222	$ 1,187	$ 1,162
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(457)	(456)	(727)	(745)
Increases due to amounts billable excluding amounts recognized as revenue during the period	360	334	774	691
Increases due to acquisitions during the period			4	20
Effect of exchange rate changes	4	5	(3)	(23)
Total changes in deferred revenue	(93)	(117)	48	(57)
Ending Balance	1,235	1,105	1,235	1,105
Deferred revenue - current	1,142	1,001	1,142	1,001	$ 1,089
Deferred revenue - noncurrent	93	104	93	104	$ 98
MIS
Change in Contract with Customer, Liability [Abstract]
Beginning Balance	388	379	313	322
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(119)	(115)	(162)	(167)
Increases due to amounts billable excluding amounts recognized as revenue during the period	98	100	219	213
Increases due to acquisitions during the period			0	0
Effect of exchange rate changes	1	1	(2)	(3)
Total changes in deferred revenue	(20)	(14)	55	43
Ending Balance	368	365	368	365
Deferred revenue - current	279	265	279	265
Deferred revenue - noncurrent	89	100	89	100
Decrease due to change in recognition of contract renewals				99
MA
Change in Contract with Customer, Liability [Abstract]
Beginning Balance	940	843	874	840
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(338)	(341)	(565)	(578)
Increases due to amounts billable excluding amounts recognized as revenue during the period	262	234	555	478
Increases due to acquisitions during the period			4	20
Effect of exchange rate changes	3	4	(1)	(20)
Total changes in deferred revenue	(73)	(103)	(7)	(100)
Ending Balance	867	740	867	740
Deferred revenue - current	863	736	863	736
Deferred revenue - noncurrent	$ 4	$ 4	$ 4	4
Decrease due to change in recognition of contract renewals				$ 99

XML

Revenues - Expected Recognition Period for Remaining Performance Obligations (Detail) $ in Millions	Jun. 30, 2021 USD ($)
MIS
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 118
MIS | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, percentage	20.00%
Revenue, remaining performance obligation, period	1 year
MIS | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, percentage	50.00%
Revenue, remaining performance obligation, period	4 years
MA
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 2,200
MA | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, percentage	65.00%
Revenue, remaining performance obligation, period	1 year
MA | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, percentage	20.00%
Revenue, remaining performance obligation, period	1 year

XML

Stock-Based Compensation - Stock-Based Compensation Cost and Associated Tax Benefit (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Share-based Payment Arrangement, Noncash Expense [Abstract]
Stock-based compensation cost	$ 41	$ 35	$ 86	$ 72
Tax benefit	$ 10	$ 7	$ 21	$ 14

XML

Stock-Based Compensation - Additional Information (Detail) $ / shares in Units, shares in Millions, $ in Millions	6 Months Ended
	Jun. 30, 2021 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee stock options, granted (in shares) | shares	0.1
Employee stock options, weighted average grant date fair value (in usd per share) | $ / shares	$ 67.41
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Other than options, shares granted (in shares) | shares	0.5
Other than options, weighted average grant date fair value (in usd per share) | $ / shares	$ 277.22
Award vesting period (in years)	4 years
Unrecognized compensation expense | $	$ 230
Weighted average period to recognize expense	2 years 7 months 6 days
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	4 years
Unrecognized compensation expense | $	$ 11
Weighted average period to recognize expense	2 years 6 months
Performance Based Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Other than options, shares granted (in shares) | shares	0.1
Other than options, weighted average grant date fair value (in usd per share) | $ / shares	$ 268.85
Award vesting period (in years)	3 years
Unrecognized compensation expense | $	$ 39
Weighted average period to recognize expense	2 years 1 month 6 days

XML

Stock-Based Compensation - Weighted Average Assumptions used in Determining Fair Value for Options Granted (Detail)	6 Months Ended
	Jun. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Expected dividend yield	0.89%
Expected stock volatility	28.00%
Risk-free interest rate	0.81%
Expected holding period	5 years 7 months 6 days

XML

Stock-Based Compensation - Stock Option Exercises and Restricted Stock Vesting (Detail) - USD ($) shares in Millions, $ in Millions	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Proceeds from stock option exercises	$ 16	$ 23
Aggregate intrinsic value	35	74
Tax benefit realized upon exercise	$ 8	$ 18
Number of shares exercised (shares)	0.2	0.4
Restricted Stock
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Fair value of shares vested	$ 187	$ 193
Tax benefit realized upon vesting	$ 43	$ 45
Number of shares vested (shares)	0.7	0.8
Performance Based Restricted Stock
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Fair value of shares vested	$ 28	$ 70
Tax benefit realized upon vesting	$ 7	$ 17
Number of shares vested (shares)	0.1	0.3

XML

Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Tax Contingency [Line Items]
Effective tax rate (percent)	23.90%		23.60%	19.00%	19.00%
Excess tax benefits from stock compensation				$ 26
Reduction resulting from lapse of applicable statute of limitations and settlement				61
Overall increase (decrease) in unrecognized tax benefits (UTPs)	$ 4			(76)
Interest accrued on UTPs		$ 40		40
Net of Federal Tax
Income Tax Contingency [Line Items]
Overall increase (decrease) in unrecognized tax benefits (UTPs)	$ 4			$ (67)

XML

Income Taxes - Income Taxes Paid (Detail) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Income Tax Disclosure [Abstract]
Income taxes paid	$ 327	$ 111

XML

Weighted Average Shares Outstanding - Reconciliation of Basic to Diluted Shares Outstanding (Detail) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Earnings Per Share [Abstract]
Basic (in shares)	186.7	187.7	187.0	187.6
Dilutive effect of shares issuable under stock-based compensation plans (in shares)	1.2	1.3	1.2	1.7
Diluted (in shares)	187.9	189.0	188.2	189.3
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above (in shares)	0.2	0.3	0.3	0.3

XML

Cash Equivalents and Investments (Detail) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	$ 2,809	$ 2,597
Short-term investments	88	99
Certificates of deposit and money market deposit accounts
Cash and Cash Equivalents [Line Items]
Cost	1,481	1,430
Gains/(Losses)	0	0
Fair Value	1,481	1,430
Cash and cash equivalents	1,370	1,325
Short-term investments	88	99
Other assets	23	6
Mutual funds
Cash and Cash Equivalents [Line Items]
Cost	53	54
Gains/(Losses)	7	6
Fair Value	60	60
Cash and cash equivalents	0	0
Short-term investments	0	0
Other assets	$ 60	$ 60

XML

Cash Equivalents and Investments (Footnote) (Detail) - Certificates of deposit and money market deposit accounts	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Short-term Investments | Minimum
Cash and Cash Equivalents [Line Items]
Securities maturity period	1 month
Short-term Investments | Maximum
Cash and Cash Equivalents [Line Items]
Securities maturity period		12 months
Other assets | Minimum
Cash and Cash Equivalents [Line Items]
Securities maturity period	13 months
Other assets | Maximum
Cash and Cash Equivalents [Line Items]
Securities maturity period		23 months
Cash and Cash Equivalents | Maximum
Cash and Cash Equivalents [Line Items]
Securities maturity period	90 days

XML

Cash Equivalents and Investments (Narrative) (Detail) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Cash and Cash Equivalents [Abstract]
Company owned life insurance (at contract value)	$ 36	$ 17

XML

Acquisitions - Narrative (Details) - USD ($) $ in Millions	Mar. 19, 2021	Feb. 13, 2020
Cortera
Business Acquisition [Line Items]
Business acquisition interests acquired	100.00%
Acquired cash included in current assets	$ 4
Accounts receivable gross included in current assets	$ 2
Regulatory Data Corporation
Business Acquisition [Line Items]
Business acquisition interests acquired		100.00%
Acquired cash included in current assets		$ 6
Accounts receivable gross included in current assets		$ 14

XML

Acquisitions - Total Consideration Relating to Acquisition (Details) - USD ($) $ in Millions	Mar. 19, 2021	Feb. 13, 2020
Cortera
Business Acquisition [Line Items]
Cash paid at closing	$ 138
Additional consideration to be paid to sellers	1
Total consideration	$ 139
Regulatory Data Corporation
Business Acquisition [Line Items]
Cash paid at closing		$ 700
Additional consideration to be paid to sellers		2
Total consideration		$ 702

XML

Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Millions	Mar. 19, 2021	Feb. 13, 2020	Jun. 30, 2021	Dec. 31, 2020	Dec. 31, 2019
Business Acquisition [Line Items]
Goodwill			$ 4,590	$ 4,556	$ 3,722
Cortera
Business Acquisition [Line Items]
Current assets	$ 7
Total intangible assets	57
Goodwill	95
Other assets	2
Liabilities:
Accounts payable and accrued liabilities	(1)
Deferred revenue	(4)
Deferred tax liabilities	(15)
Other liabilities	(2)
Total liabilities	(22)
Net assets acquired	$ 139
Acquired finite-lived intangible asset, useful life	11 years
Cortera | Database
Business Acquisition [Line Items]
Total intangible assets	$ 38
Liabilities:
Finite-lived intangible asset, useful life	10 years
Cortera | Customer relationships
Business Acquisition [Line Items]
Total intangible assets	$ 9
Liabilities:
Finite-lived intangible asset, useful life	18 years
Cortera | Product technology
Business Acquisition [Line Items]
Total intangible assets	$ 9
Liabilities:
Finite-lived intangible asset, useful life	8 years
Cortera | Trade names
Business Acquisition [Line Items]
Total intangible assets	$ 1
Liabilities:
Finite-lived intangible asset, useful life	5 years
Regulatory Data Corporation
Business Acquisition [Line Items]
Current assets		$ 24
Total intangible assets		280
Goodwill		494
Other assets		2
Liabilities:
Accounts payable and accrued liabilities		(5)
Deferred revenue		(20)
Deferred tax liabilities		(71)
Other liabilities		(2)
Total liabilities		(98)
Net assets acquired		$ 702
Acquired finite-lived intangible asset, useful life		19 years
Regulatory Data Corporation | Database
Business Acquisition [Line Items]
Total intangible assets		$ 86
Liabilities:
Finite-lived intangible asset, useful life		10 years
Regulatory Data Corporation | Customer relationships
Business Acquisition [Line Items]
Total intangible assets		$ 174
Liabilities:
Finite-lived intangible asset, useful life		25 years
Regulatory Data Corporation | Product technology
Business Acquisition [Line Items]
Total intangible assets		$ 17
Liabilities:
Finite-lived intangible asset, useful life		4 years
Regulatory Data Corporation | Trade names
Business Acquisition [Line Items]
Total intangible assets		$ 3
Liabilities:
Finite-lived intangible asset, useful life		3 years

XML

Derivative Instruments And Hedging Activities - Schedule of Interest Rate Swap (Details) - Fair Value Hedging - Interest Rate Swap - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Derivative [Line Items]
Notional Amount	$ 1,380	$ 1,380
2012 Senior Notes due 2022
Derivative [Line Items]
Nature of Swap	Pay Floating/Receive Fixed
Notional Amount	$ 330	330
Floating Interest Rate	3-month USD LIBOR
2017 Senior Notes due 2023
Derivative [Line Items]
Nature of Swap	Pay Floating/Receive Fixed
Notional Amount	$ 250	250
Floating Interest Rate	3-month USD LIBOR
2017 Senior Notes due 2028
Derivative [Line Items]
Nature of Swap	Pay Floating/Receive Fixed
Notional Amount	$ 500	500
Floating Interest Rate	3-month USD LIBOR
2020 Senior Notes due 2025
Derivative [Line Items]
Nature of Swap	Pay Floating/Receive Fixed
Notional Amount	$ 300	$ 300
Floating Interest Rate	6-month USD LIBOR

XML

Derivative Instruments And Hedging Activities - Summary of Net Gain (Loss) on Interest Rate Swaps Designated in Fair Value Hedge (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Derivative Instruments, Gain (Loss) [Line Items]
Interest expense, net	$ (49)	$ (60)	$ (56)	$ (100)
Designated as Hedging Instrument | Interest Rate Swap | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Fair value changes on interest rate swaps	0	2	(24)	60
Fair value changes on hedged debt	0	(2)	24	(60)
Designated as Hedging Instrument | Interest Rate Swap | Interest Expense | Fair Value hedge Net Interest Settlements and Accruals
Derivative Instruments, Gain (Loss) [Line Items]
Net interest settlements and accruals on interest rate swaps	$ 6	$ 5	$ 11	$ 8

XML

Derivative Instruments And Hedging Activities - Additional Information (Detail)	1 Months Ended
	Jan. 31, 2020 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2021 EUR (€)	Dec. 31, 2020 USD ($)	Apr. 30, 2020 USD ($)
Derivative [Line Items]
Cumulative loss		$ 425,000,000		$ 432,000,000
Designated as Hedging Instrument
Derivative [Line Items]
Cumulative loss		164,000,000		269,000,000
Net Investment Hedging | Designated as Hedging Instrument
Derivative [Line Items]
Cumulative loss		116,000,000		220,000,000
Net Investment Hedging | Designated as Hedging Instrument | Cross-currency swap
Derivative [Line Items]
Notional Amount | €			€ 2,019,000,000
Cumulative loss		70,000,000		124,000,000
Cash Flow Hedging | Forward Contracts
Derivative [Line Items]
Cumulative loss					$ 68,000,000
Cash Flow Hedging | Designated as Hedging Instrument
Derivative [Line Items]
Cumulative loss		48,000,000		49,000,000
Cash Flow Hedging | Designated as Hedging Instrument | Cross-currency swap
Derivative [Line Items]
Cumulative loss		$ (2,000,000)		$ (2,000,000)
Cash Flow Hedging | Designated as Hedging Instrument | Forward Contracts
Derivative [Line Items]
Notional Amount	$ 300,000,000
Forward interest rate	2.0103%
Debt instrument, term	30 years
1.75% 2015 Senior Notes, due 2027
Derivative [Line Items]
Notes payable, interest rate		1.75%	1.75%	1.75%
1.75% 2015 Senior Notes, due 2027 | Net Investment Hedging | Designated as Hedging Instrument | Cross-currency swap
Derivative [Line Items]
Notional Amount | €			€ 500,000,000
2019 Senior Notes Due 2030 | Net Investment Hedging | Designated as Hedging Instrument | Cross-currency swap
Derivative [Line Items]
Notional Amount | €			€ 750,000,000
3.25% 2020 Senior Notes, due 2050
Derivative [Line Items]
Notes payable, interest rate		3.25%	3.25%	3.25%

XML

Derivative Instruments And Hedging Activities - Summary of Notional Amounts of Outstanding Cross Currency Swap (Detail) - Cross-currency swap - Net Investment Hedging € in Millions, $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)	Jun. 30, 2021 EUR (€)	Dec. 31, 2020 EUR (€)
3.96%
Derivative [Line Items]
Nature of Swap	Pay Fixed/Receive Fixed	Pay Fixed/Receive Fixed
3-month U.S. LIBOR
Derivative [Line Items]
Nature of Swap	Pay Floating/Receive Floating	Pay Floating/Receive Floating
Currency Paid
Derivative [Line Items]
Notional Amount | €			€ 2,019	€ 2,038
Currency Paid | 1.43%
Derivative [Line Items]
Notional Amount | €			€ 1,060	€ 1,079
Weighted Average Fixed Interest Rate	2.15%	1.43%	2.15%	1.43%
Currency Paid | 3-month EURIBOR
Derivative [Line Items]
Notional Amount | €			€ 959	€ 959
Weighted Average Floating Interest Rate	Based on 3-month EURIBOR	Based on 3-month EURIBOR
Currency Received
Derivative [Line Items]
Notional Amount | $	$ 2,300	$ 2,300
Currency Received | 3.96%
Derivative [Line Items]
Notional Amount | $	$ 1,220	$ 1,220
Weighted Average Fixed Interest Rate	4.45%	3.96%	4.45%	3.96%
Currency Received | 3-month U.S. LIBOR
Derivative [Line Items]
Notional Amount | $	$ 1,080	$ 1,080
Weighted Average Floating Interest Rate	Based on 3-month USD LIBOR	Based on 3-month USD LIBOR

XML

Derivative Instruments And Hedging Activities - Schedule of Notional Amount of Net Investment Hedges (Detail) - Designated as Hedging Instrument - Cross-currency swap € in Millions	Jun. 30, 2021 EUR (€)
Net Investment Hedging
Derivative [Line Items]
Notional Amount	€ 2,019
2021
Derivative [Line Items]
Notional Amount	0
2022
Derivative [Line Items]
Notional Amount	438
2023
Derivative [Line Items]
Notional Amount	442
2024
Derivative [Line Items]
Notional Amount	443
2026
Derivative [Line Items]
Notional Amount	450
2027
Derivative [Line Items]
Notional Amount	€ 246

XML

Derivative Instruments And Hedging Activities - Summary of Notional Amounts of Outstanding Foreign Exchange Forwards (Detail) - Not Designated as Accounting Hedges ₽ in Millions, € in Millions, ₨ in Millions, ¥ in Millions, £ in Millions, $ in Millions, $ in Millions, $ in Millions	Jun. 30, 2021 USD ($)	Jun. 30, 2021 EUR (€)	Jun. 30, 2021 GBP (£)	Jun. 30, 2021 JPY (¥)	Jun. 30, 2021 CAD ($)	Jun. 30, 2021 SGD ($)	Jun. 30, 2021 RUB (₽)	Jun. 30, 2021 INR (₨)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 EUR (€)	Dec. 31, 2020 GBP (£)	Dec. 31, 2020 JPY (¥)	Dec. 31, 2020 CAD ($)	Dec. 31, 2020 SGD ($)	Dec. 31, 2020 RUB (₽)	Dec. 31, 2020 INR (₨)
Contracts to sell USD for GBP
Derivative [Line Items]
Notional Amount	$ 424		£ 301						$ 295		£ 222
Contracts to sell USD for Japanese yen
Derivative [Line Items]
Notional Amount	15			¥ 1,600					15			¥ 1,600
Contracts to sell USD for Canadian dollars
Derivative [Line Items]
Notional Amount	105				$ 129				107				$ 140
Contracts to sell USD for Singapore dollars
Derivative [Line Items]
Notional Amount	59					$ 79			59					$ 79
Contracts to sell USD for euros
Derivative [Line Items]
Notional Amount	549	€ 450							447	€ 376
Contracts to sell Euros for GBP
Derivative [Line Items]
Notional Amount		€ 135	£ 116							€ 135	£ 121
Contracts to sell USD for Russian ruble
Derivative [Line Items]
Notional Amount	13						₽ 1,000		13						₽ 1,000
Contracts to sell USD for Indian rupee
Derivative [Line Items]
Notional Amount	$ 18							₨ 1,350	$ 18							₨ 1,350

XML

Derivative Instruments And Hedging Activities - Summary of Notional Amounts of Outstanding Forward Contracts Designated as a Net Investment Hedge (Detail) - Net Investment Hedging - Designated as Hedging Instrument € in Millions, £ in Millions, $ in Millions	Jun. 30, 2021 USD ($)	Jun. 30, 2021 EUR (€)	Jun. 30, 2021 GBP (£)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 EUR (€)	Dec. 31, 2020 GBP (£)
Contract to sell EUR for USD
Derivative [Line Items]
Notional Amount	$ 728	€ 597		$ 627	€ 524
Contract to sell GBP for EUR
Derivative [Line Items]
Notional Amount		€ 155	£ 134		€ 148	£ 134

XML

Derivative Instruments And Hedging Activities - Gains (Losses) Recognized in AOCI and Reclassified from AOCI on Derivatives (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Derivative Instruments, Gain (Loss) [Line Items]
Cash Flow Hedging Relationships, Amount of Gain/(Loss) Recognized in AOCI on Derivative, net of Tax	$ 0	$ (14)	$ 0	$ (50)
Total, Amount of Gain/(Loss) Recognized in AOCI on Derivative, net of Tax	(28)	(87)	105	(34)
Net investment hedges - reclassification of gains included in net income - Net of Tax	0	0	1	0
Cash Flow Hedging Relationships, Amount of Gain/(Loss) Reclassified from AOCI into Income, net of Tax			(1)	(1)
Total, Amount of Gain/(Loss) Reclassified from AOCI into Income, net of Tax	0	0	0	(1)
Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)	9	14	19	30
Net Investment Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Net Investment Hedging Relationships, Amount of Gain/(Loss) Recognized in AOCI on Derivative, net of Tax	(28)	(73)	105	16
Net investment hedges - reclassification of gains included in net income - Net of Tax	0	0	1	0
Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)	9	14	19	30
Cash Flow Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Cash Flow Hedging Relationships, Amount of Gain/(Loss) Recognized in AOCI on Derivative, net of Tax	0	(14)	0	(50)
Cash Flow Hedging Relationships, Amount of Gain/(Loss) Reclassified from AOCI into Income, net of Tax	0	0	(1)	(1)
Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)	0	0	0	0
FX forwards | Net Investment Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Net Investment Hedging Relationships, Amount of Gain/(Loss) Recognized in AOCI on Derivative, net of Tax	0	0	16	0
Net investment hedges - reclassification of gains included in net income - Net of Tax	0	0	1	0
Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)	0	0	0	0
Cross-currency swap | Net Investment Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Net Investment Hedging Relationships, Amount of Gain/(Loss) Recognized in AOCI on Derivative, net of Tax	(18)	(49)	54	17
Net investment hedges - reclassification of gains included in net income - Net of Tax	0	0	0	0
Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)	9	14	19	30
Long-term debt | Net Investment Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Net Investment Hedging Relationships, Amount of Gain/(Loss) Recognized in AOCI on Derivative, net of Tax	(10)	(24)	35	(1)
Net investment hedges - reclassification of gains included in net income - Net of Tax	0	0	0	0
Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)	0	0	0	0
Interest rate contract | Cash Flow Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Cash Flow Hedging Relationships, Amount of Gain/(Loss) Recognized in AOCI on Derivative, net of Tax	0	(14)	0	(50)
Cash Flow Hedging Relationships, Amount of Gain/(Loss) Reclassified from AOCI into Income, net of Tax	0	0	(1)	(1)
Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)	$ 0	$ 0	$ 0	$ 0

XML

Derivative Instruments And Hedging Activities - Cumulative Amount of Unrecognized Hedge Losses Recorded in AOCI (Detail) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Derivative [Line Items]
Cumulative Gains/(Losses), net of tax	$ (425)	$ (432)
Designated as Hedging Instrument
Derivative [Line Items]
Cumulative Gains/(Losses), net of tax	(164)	(269)
Net Investment Hedging | Designated as Hedging Instrument
Derivative [Line Items]
Cumulative Gains/(Losses), net of tax	(116)	(220)
Net Investment Hedging | Cross currency swaps | Designated as Hedging Instrument
Derivative [Line Items]
Cumulative Gains/(Losses), net of tax	(70)	(124)
Net Investment Hedging | FX forwards | Designated as Hedging Instrument
Derivative [Line Items]
Cumulative Gains/(Losses), net of tax	27	12
Net Investment Hedging | Long-term debt | Designated as Hedging Instrument
Derivative [Line Items]
Cumulative Gains/(Losses), net of tax	(73)	(108)
Cash Flow Hedging | Designated as Hedging Instrument
Derivative [Line Items]
Cumulative Gains/(Losses), net of tax	(48)	(49)
Cash Flow Hedging | Cross currency swaps | Designated as Hedging Instrument
Derivative [Line Items]
Cumulative Gains/(Losses), net of tax	2	2
Cash Flow Hedging | Interest rate contract | Designated as Hedging Instrument
Derivative [Line Items]
Cumulative Gains/(Losses), net of tax	$ (50)	$ (51)

XML

Derivative Instruments And Hedging Activities - Summary of Net Gain (Loss) on Foreign Exchange Forwards Not Designated as Hedging Instruments (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Other non-operating income, net
Derivative Instruments, Gain (Loss) [Line Items]
Foreign exchange forwards amount of gain (loss) recognized in income	$ (1)	$ 5	$ (7)	$ (35)

XML

Derivative Instruments And Hedging Activities - Fair Value of Derivative Instruments (Detail) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Derivatives, Fair Value [Line Items]
Assets	$ 66	$ 88
Liabilities	1,594	1,716
Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Assets	63	57
Liabilities	86	184
Designated as Hedging Instrument | Long-term debt | Net Investment Hedging
Derivatives, Fair Value [Line Items]
Liabilities	1,482	1,530
Designated as Hedging Instrument | Cross-currency swap | Other assets | Net Investment Hedging
Derivatives, Fair Value [Line Items]
Assets	7	0
Designated as Hedging Instrument | Cross-currency swap | Accounts payable and accrued liabilities | Net Investment Hedging
Derivatives, Fair Value [Line Items]
Liabilities	0	23
Designated as Hedging Instrument | Cross-currency swap | Other liabilities | Net Investment Hedging
Derivatives, Fair Value [Line Items]
Liabilities	80	144
Designated as Hedging Instrument | Interest Rate Swap | Other assets | Fair Value Hedging
Derivatives, Fair Value [Line Items]
Assets	37	57
Designated as Hedging Instrument | Interest Rate Swap | Other liabilities | Fair Value Hedging
Derivatives, Fair Value [Line Items]
Liabilities	5	1
Designated as Hedging Instrument | FX forwards | Other current assets | Net Investment Hedging
Derivatives, Fair Value [Line Items]
Assets	19	0
Designated as Hedging Instrument | FX forwards | Accounts payable and accrued liabilities | Net Investment Hedging
Derivatives, Fair Value [Line Items]
Liabilities	1	16
Not Designated as Accounting Hedges | FX forwards | Other current assets
Derivatives, Fair Value [Line Items]
Assets	3	31
Not Designated as Accounting Hedges | FX forwards | Accounts payable and accrued liabilities
Derivatives, Fair Value [Line Items]
Liabilities	$ 26	$ 2

XML

Goodwill And Other Acquired Intangible Assets - Activity in Goodwill (Detail) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Goodwill [Roll Forward]
Beginning balance, goodwill gross	$ 4,568	$ 3,734
Beginning balance, Accumulated impairment charge	(12)	(12)
Beginning balance, goodwill net	4,556	3,722
Additions/adjustments	95	626
Foreign currency translation adjustments	(61)	208
Ending balance, goodwill gross	4,602	4,568
Ending balance, Accumulated impairment charge	(12)	(12)
Ending balance, goodwill net	4,590	4,556
MIS
Goodwill [Roll Forward]
Beginning balance, goodwill gross	311	315
Beginning balance, Accumulated impairment charge	0	0
Beginning balance, goodwill net	311	315
Additions/adjustments	0	(2)
Foreign currency translation adjustments	1	(2)
Ending balance, goodwill gross	312	311
Ending balance, Accumulated impairment charge	0	0
Ending balance, goodwill net	312	311
MA
Goodwill [Roll Forward]
Beginning balance, goodwill gross	4,257	3,419
Beginning balance, Accumulated impairment charge	(12)	(12)
Beginning balance, goodwill net	4,245	3,407
Additions/adjustments	95	628
Foreign currency translation adjustments	(62)	210
Ending balance, goodwill gross	4,290	4,257
Ending balance, Accumulated impairment charge	(12)	(12)
Ending balance, goodwill net	$ 4,278	$ 4,245

XML

Goodwill And Other Acquired Intangible Assets - Acquired Intangible Assets and Related Amortization (Detail) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, net	$ 1,784	$ 1,824
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	1,611	1,623
Accumulated amortization	(347)	(313)
Acquired intangible assets, net	1,264	1,310
Software/product technology
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	442	441
Accumulated amortization	(195)	(177)
Acquired intangible assets, net	247	264
Database
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	181	144
Accumulated amortization	(37)	(29)
Acquired intangible assets, net	144	115
Trade names
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	160	161
Accumulated amortization	(42)	(38)
Acquired intangible assets, net	118	123
Other
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, gross	54	55
Accumulated amortization	(43)	(43)
Acquired intangible assets, net	$ 11	$ 12

XML

Goodwill And Other Acquired Intangible Assets - Amortization Expense Relating to Acquired Intangible Assets (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 36	$ 31	$ 71	$ 59

XML

Goodwill And Other Acquired Intangible Assets - Estimated Future Amortization Expense for Acquired Intangible Assets Subject to Amortization (Detail) $ in Millions	Jun. 30, 2021 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2021 (After June 30,)	$ 63
2022	133
2023	129
2024	125
2025	121
Thereafter	1,213
Total estimated future amortization	$ 1,784

XML

Restructuring - Additional Information (Detail) - USD ($) $ in Millions		6 Months Ended	24 Months Ended
	Dec. 22, 2020	Jun. 30, 2021	Dec. 31, 2022	Dec. 31, 2020
2020 MA Strategic Reorganization Restructuring Program
Restructuring Cost and Reserve [Line Items]
Remaining restructuring liability		$ 12
2020 MA Strategic Reorganization Restructuring Program | Estimated Annual Savings
Restructuring Cost and Reserve [Line Items]
Effect on future earnings, amount	$ 20
2020 MA Strategic Reorganization Restructuring Program | Forecast
Restructuring Cost and Reserve [Line Items]
Payments for restructuring			$ 20
Employee Severance
Restructuring Cost and Reserve [Line Items]
Remaining restructuring liability		12		$ 18
Employee Severance | 2020 MA Strategic Reorganization Restructuring Program
Restructuring Cost and Reserve [Line Items]
Cost incurred to date		20
Payments for restructuring		$ 8

XML

Restructuring - Restructuring Expenses Included in Consolidated Statements of Operations (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Restructuring Cost and Reserve [Line Items]
Restructuring	$ 0	$ (2)	$ 2	$ (3)
2020 MA Strategic Reorganization Restructuring Program
Restructuring Cost and Reserve [Line Items]
Restructuring	$ 0	$ 0	$ 2	$ 0

XML

Restructuring - Changes in Restructuring Liability (Details) $ in Millions	6 Months Ended
	Jun. 30, 2021 USD ($)
Employee Severance
Restructuring Reserve [Roll Forward]
Restructuring liability, Beginning Balance	$ 18
Restructuring liability, Ending Balance	12
2020 MA Strategic Reorganization Restructuring Program
Restructuring Reserve [Roll Forward]
Restructuring liability, Ending Balance	12
2020 MA Strategic Reorganization Restructuring Program | Employee Severance
Restructuring Reserve [Roll Forward]
Cost incurred and adjustments	2
Cash payments and adjustments	(8)
Cost incurred to date	$ 20

XML

Fair Value - Financial Instruments Carried at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Assets:
Derivatives	$ 66	$ 88
Mutual funds	60	60
Total	126	148
Liabilities:
Derivatives	112	186
Total	112	186
Level 1
Assets:
Derivatives	0	0
Mutual funds	60	60
Total	60	60
Liabilities:
Derivatives	0	0
Total	0	0
Level 2
Assets:
Derivatives	66	88
Mutual funds	0	0
Total	66	88
Liabilities:
Derivatives	112	186
Total	$ 112	$ 186

XML

Other Balance Sheet and Statement of Operations Information - Additional Details Related to Certain Balance Sheet Captions (Detail) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Other current assets:
Prepaid taxes	$ 125	$ 94
Prepaid expenses	78	91
Capitalized costs to obtain and fulfill sales contracts	92	93
Foreign exchange forwards on certain assets and liabilities	3	31
Derivative instruments designated as accounting hedges	19	0
Other	62	74
Total other current assets	379	383
Other assets:
Investments in non-consolidated affiliates	151	135
Deposits for real-estate leases	14	19
Indemnification assets related to acquisitions	15	15
Mutual funds and fixed deposits	83	66
Company owned life insurance (at contract value)	36	17
Costs to obtain sales contracts	142	134
Cross currency and interest rate swaps	44	57
Pension and other retirement employee benefits	19	21
Other	52	51
Total other assets	556	515
Accounts payable and accrued liabilities:
Salaries and benefits	149	197
Incentive compensation	134	226
Customer credits, advanced payments and advanced billings	60	42
Dividends	5	11
Professional service fees	60	53
Interest accrued on debt	72	82
Accounts payable	18	39
Income taxes	108	128
Pension and other retirement employee benefits	46	45
Accrued royalties	23	19
Foreign exchange forwards on certain assets and liabilities	26	2
Restructuring liability	12	18
Derivative instruments designated as accounting hedges	1	39
Other	102	138
Total accounts payable and accrued liabilities	816	1,039
Other liabilities:
Pension and other retirement employee benefits	211	244
Interest accrued on UTPs	75	113
MAKS indemnification provisions	33	33
Income tax liability - non-current portion	18	18
Derivative instruments designated as accounting hedges	85	145
Other	38	37
Total other liabilities	$ 460	$ 590

XML

Other Balance Sheet and Statement of Operations Information - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Other Balance Sheet And Statement Of Operations Information [Abstract]
Loss pursuant to the divestiture of MAKS	$ 0	$ 0	$ 0	$ 9

XML

Other Balance Sheet and Statement of Operations Information - Other Non-Operating Interest (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Other Balance Sheet And Statement Of Operations Information [Abstract]
FX gain (loss)	$ 2	$ (8)	$ 0	$ 5
Net periodic pension costs - other components (1)	(3)	4	1	7
Income/(loss) from investments in non-consolidated affiliates	1	3	9	0
Other	6	17	12	16
Total	$ 6	$ 16	$ 22	$ 28

XML

Comprehensive Income And Accumulated Other Comprehensive Loss - Reclassification out of AOCI (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Derivative Instruments, Gain (Loss) [Line Items]
Other non-operating income, net	$ 6	$ 16	$ 22	$ 28
Total before income taxes	758	666	1,620	1,230
Provision for income taxes	(181)	(157)	(307)	(234)
Net income attributable to Moody's	577	509	1,313	997
Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Net income attributable to Moody's	(8)	(1)	(10)	(3)
Losses on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Provision for income taxes			0	0
Net income attributable to Moody's			(1)	(1)
Losses on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Income | Interest rate contract
Derivative Instruments, Gain (Loss) [Line Items]
Other non-operating income, net			(1)	(1)
Net Investment Hedges | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Provision for income taxes	(1)	0	(1)	0
Net income attributable to Moody's	0	0	1	0
Net Investment Hedges | Reclassification out of Accumulated Other Comprehensive Income | FX forwards
Derivative Instruments, Gain (Loss) [Line Items]
Other non-operating income, net	1	0	2	0
Total pension and other retirement benefits | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Total before income taxes	(10)	(1)	(13)	(3)
Provision for income taxes	2	0	3	1
Net income attributable to Moody's	(8)	(1)	(10)	(2)
Amortization of actuarial losses and prior service costs included in net income | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Other non-operating income, net	(3)	(1)	(6)	(3)
Settlement charge | Reclassification out of Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Other non-operating income, net	$ (7)	$ 0	$ (7)	$ 0

XML

Comprehensive Income And Accumulated Other Comprehensive Loss - Changes in Components of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			$ 1,569
Ending balance	$ 2,186		2,186
Total
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(440)	$ (554)	(432)	$ (439)
Other comprehensive income/(loss) before reclassifications	7	11	(3)	(106)
Amounts reclassified from AOCL	8	1	10	3
Other comprehensive income/(loss)	15	12	7	(103)
Ending balance	(425)	(542)	(425)	(542)
Pension and Other Retirement Benefits
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(116)	(92)	(118)	(92)
Other comprehensive income/(loss) before reclassifications	0	7	0	6
Amounts reclassified from AOCL	8	1	10	2
Other comprehensive income/(loss)	8	8	10	8
Ending balance	(108)	(84)	(108)	(84)
Cash Flow Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(48)	(35)	(49)	0
Other comprehensive income/(loss) before reclassifications	0	(14)	0	(50)
Amounts reclassified from AOCL	0	0	1	1
Other comprehensive income/(loss)	0	(14)	1	(49)
Ending balance	(48)	(49)	(48)	(49)
Foreign Currency Translation Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(188)	(570)	(45)	(401)
Other comprehensive income/(loss) before reclassifications	36	91	(107)	(78)
Amounts reclassified from AOCL	0	0	0	0
Other comprehensive income/(loss)	36	91	(107)	(78)
Ending balance	(152)	(479)	(152)	(479)
Net Investment Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(88)	143	(220)	54
Other comprehensive income/(loss) before reclassifications	(29)	(73)	104	16
Amounts reclassified from AOCL	0	0	(1)	0
Other comprehensive income/(loss)	(29)	(73)	103	16
Ending balance	$ (117)	$ 70	$ (117)	$ 70

XML

Pension and Other Retirement Benefits - Components of Net Periodic Benefit Expense Related to Post-Retirement Plans (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Components of net periodic expense
Interest cost	$ 4	$ 5	$ 8	$ 10
Pension Plans
Components of net periodic expense
Service cost	5	3	10	8
Interest cost	3	5	7	9
Expected return on plan assets	(6)	(5)	(13)	(10)
Amortization of net actuarial loss from earlier periods	3	1	5	3
Loss on settlement of pension obligation	7	0	7	0
Net periodic expense	12	4	16	10
Other Retirement Plans
Components of net periodic expense
Service cost	1	1	2	2
Interest cost	1	0	1	0
Expected return on plan assets	0	0	0	0
Amortization of net actuarial loss from earlier periods	0	0	0	0
Loss on settlement of pension obligation	0	0	0	0
Net periodic expense	$ 2	$ 1	$ 3	$ 2

XML

Pension and Other Retirement Benefits - Additional Information (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2021 USD ($)
Unfunded Plan | Pension Plans | United States
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Employer contributions	$ 41

XML

Indebtedness - Summary of Total Indebtedness (Detail) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Principal Amount	$ 6,382	$ 6,430
Fair Value of Interest Rate Swap	32	56
Unamortized (Discount) Premium	(22)	(24)
Unamortized Debt Issuance Costs	(37)	(40)
Long term debt	$ 6,355	$ 6,422
4.50% 2012 Senior Notes, due 2022
Debt Instrument [Line Items]
Notes payable, interest rate	4.50%	4.50%
Principal Amount	$ 500	$ 500
Fair Value of Interest Rate Swap	10	14
Unamortized (Discount) Premium	0	(1)
Unamortized Debt Issuance Costs	0	(1)
Long term debt	$ 510	$ 512
4.875% 2013 Senior Notes, due 2024
Debt Instrument [Line Items]
Notes payable, interest rate	4.875%	4.875%
Principal Amount	$ 500	$ 500
Fair Value of Interest Rate Swap	0	0
Unamortized (Discount) Premium	(1)	(1)
Unamortized Debt Issuance Costs	(1)	(1)
Long term debt	$ 498	$ 498
5.25% 2014 Senior Notes, due 2044
Debt Instrument [Line Items]
Notes payable, interest rate	5.25%	5.25%
Principal Amount	$ 600	$ 600
Fair Value of Interest Rate Swap	0	0
Unamortized (Discount) Premium	3	3
Unamortized Debt Issuance Costs	(5)	(5)
Long term debt	$ 598	$ 598
1.75% 2015 Senior Notes, due 2027
Debt Instrument [Line Items]
Notes payable, interest rate	1.75%	1.75%
Principal Amount	$ 593	$ 612
Fair Value of Interest Rate Swap	0	0
Unamortized (Discount) Premium	0	0
Unamortized Debt Issuance Costs	(2)	(2)
Long term debt	$ 591	$ 610
2.625% 2017 Senior Notes, due 2023
Debt Instrument [Line Items]
Notes payable, interest rate	2.625%	2.625%
Principal Amount	$ 500	$ 500
Fair Value of Interest Rate Swap	9	12
Unamortized (Discount) Premium	0	0
Unamortized Debt Issuance Costs	(1)	(2)
Long term debt	$ 508	$ 510
3.25% 2017 Senior Notes, due 2028
Debt Instrument [Line Items]
Notes payable, interest rate	3.25%	3.25%
Principal Amount	$ 500	$ 500
Fair Value of Interest Rate Swap	18	31
Unamortized (Discount) Premium	(4)	(4)
Unamortized Debt Issuance Costs	(3)	(3)
Long term debt	$ 511	$ 524
4.25% 2018 Senior Notes, due 2029
Debt Instrument [Line Items]
Notes payable, interest rate	4.25%	4.25%
Principal Amount	$ 400	$ 400
Fair Value of Interest Rate Swap	0	0
Unamortized (Discount) Premium	(2)	(3)
Unamortized Debt Issuance Costs	(3)	(3)
Long term debt	$ 395	$ 394
4.875% 2018 Senior Notes, due 2048
Debt Instrument [Line Items]
Notes payable, interest rate	4.875%	4.875%
Principal Amount	$ 400	$ 400
Fair Value of Interest Rate Swap	0	0
Unamortized (Discount) Premium	(6)	(6)
Unamortized Debt Issuance Costs	(4)	(4)
Long term debt	$ 390	$ 390
0.950% Senior Notes Due 2030
Debt Instrument [Line Items]
Notes payable, interest rate	0.95%	0.95%
Principal Amount	$ 889	$ 918
Fair Value of Interest Rate Swap	0	0
Unamortized (Discount) Premium	(3)	(3)
Unamortized Debt Issuance Costs	(6)	(6)
Long term debt	$ 880	$ 909
3.75% 2020 Senior Notes, due 2025
Debt Instrument [Line Items]
Notes payable, interest rate	3.75%	3.75%
Principal Amount	$ 700	$ 700
Fair Value of Interest Rate Swap	(5)	(1)
Unamortized (Discount) Premium	(1)	(1)
Unamortized Debt Issuance Costs	(4)	(5)
Long term debt	$ 690	$ 693
3.25% 2020 Senior Notes, due 2050
Debt Instrument [Line Items]
Notes payable, interest rate	3.25%	3.25%
Principal Amount	$ 300	$ 300
Fair Value of Interest Rate Swap	0	0
Unamortized (Discount) Premium	(4)	(4)
Unamortized Debt Issuance Costs	(3)	(3)
Long term debt	$ 293	$ 293
2.55% 2020 Senior Notes, due 2060
Debt Instrument [Line Items]
Notes payable, interest rate	2.55%	2.55%
Principal Amount	$ 500	$ 500
Fair Value of Interest Rate Swap	0	0
Unamortized (Discount) Premium	(4)	(4)
Unamortized Debt Issuance Costs	(5)	(5)
Long term debt	$ 491	$ 491

XML

Indebtedness - Principal Payments Due on Long-Term Borrowings (Detail) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
2021 (After June 30,)	$ 0
2022	500
2023	500
2024	500
2025	700
Thereafter	4,182
Total principal payment	6,382	$ 6,430
4.50% 2012 Senior Notes, due 2022
Debt Instrument [Line Items]
2022	500
Total principal payment	500	500
4.875% 2013 Senior Notes, due 2024
Debt Instrument [Line Items]
2024	500
Total principal payment	500	500
5.25% 2014 Senior Notes, due 2044
Debt Instrument [Line Items]
Thereafter	600
Total principal payment	600	600
1.75% 2015 Senior Notes, due 2027
Debt Instrument [Line Items]
Thereafter	593
Total principal payment	593	612
2.625% 2017 Senior Notes, due 2023
Debt Instrument [Line Items]
2023	500
Total principal payment	500	500
3.25% 2017 Senior Notes, due 2028
Debt Instrument [Line Items]
Thereafter	500
Total principal payment	500	500
4.25% 2018 Senior Notes, due 2029
Debt Instrument [Line Items]
Thereafter	400
Total principal payment	400	400
4.875% 2018 Senior Notes, due 2048
Debt Instrument [Line Items]
Thereafter	400
Total principal payment	400	400
0.950% Senior Notes Due 2030
Debt Instrument [Line Items]
Thereafter	889
Total principal payment	889	918
3.75% 2020 Senior Notes, due 2025
Debt Instrument [Line Items]
2025	700
Total principal payment	700	700
3.25% 2020 Senior Notes, due 2050
Debt Instrument [Line Items]
Thereafter	300
Total principal payment	300	300
2.55% 2020 Senior Notes, due 2060
Debt Instrument [Line Items]
Thereafter	500
Total principal payment	$ 500	$ 500

XML

Indebtedness - Summary of Components of Interest as Presented in Consolidated Statements of Operations (Detail) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Debt Disclosure [Abstract]
Income	$ 1		$ 3	$ 4	$ 7
Expense on borrowings	(41)		(48)	(82)	(79)
Income (expense) on UTPs and other tax related liabilities	(5)		(10)	30	(18)
Net periodic pension costs - interest component	(4)		(5)	(8)	(10)
Interest expense, net	(49)		(60)	(56)	(100)
Interest paid	$ 13		$ 23	86	$ 72
Interest accrued on UTPs		$ 40		$ 40

XML

Indebtedness - Fair Value and Carrying Value of Long-Term Debt (Detail) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Carrying Amount	$ 6,355	$ 6,422
Estimated Fair Value	7,024	7,256
4.50% 2012 Senior Notes, due 2022
Debt Instrument [Line Items]
Carrying Amount	510	512
Estimated Fair Value	$ 522	$ 530
Notes payable, interest rate	4.50%	4.50%
4.875% 2013 Senior Notes, due 2024
Debt Instrument [Line Items]
Carrying Amount	$ 498	$ 498
Estimated Fair Value	$ 551	$ 562
Notes payable, interest rate	4.875%	4.875%
5.25% 2014 Senior Notes, due 2044
Debt Instrument [Line Items]
Carrying Amount	$ 598	$ 598
Estimated Fair Value	$ 808	$ 828
Notes payable, interest rate	5.25%	5.25%
1.75% 2015 Senior Notes, due 2027
Debt Instrument [Line Items]
Carrying Amount	$ 591	$ 610
Estimated Fair Value	$ 643	$ 674
Notes payable, interest rate	1.75%	1.75%
2.625% 2017 Senior Notes, due 2023
Debt Instrument [Line Items]
Carrying Amount	$ 508	$ 510
Estimated Fair Value	$ 516	$ 522
Notes payable, interest rate	2.625%	2.625%
3.25% 2017 Senior Notes, due 2028
Debt Instrument [Line Items]
Carrying Amount	$ 511	$ 524
Estimated Fair Value	$ 550	$ 561
Notes payable, interest rate	3.25%	3.25%
4.25% 2018 Senior Notes, due 2029
Debt Instrument [Line Items]
Carrying Amount	$ 395	$ 394
Estimated Fair Value	$ 465	$ 480
Notes payable, interest rate	4.25%	4.25%
4.875% 2018 Senior Notes, due 2048
Debt Instrument [Line Items]
Carrying Amount	$ 390	$ 390
Estimated Fair Value	$ 527	$ 544
Notes payable, interest rate	4.875%	4.875%
0.950% Senior Notes Due 2030
Debt Instrument [Line Items]
Carrying Amount	$ 880	$ 909
Estimated Fair Value	$ 919	$ 974
Notes payable, interest rate	0.95%	0.95%
3.75% 2020 Senior Notes, due 2025
Debt Instrument [Line Items]
Carrying Amount	$ 690	$ 693
Estimated Fair Value	$ 768	$ 785
Notes payable, interest rate	3.75%	3.75%
3.25% 2020 Senior Notes, due 2050
Debt Instrument [Line Items]
Carrying Amount	$ 293	$ 293
Estimated Fair Value	$ 313	$ 329
Notes payable, interest rate	3.25%	3.25%
2.55% 2020 Senior Notes, due 2060
Debt Instrument [Line Items]
Carrying Amount	$ 491	$ 491
Estimated Fair Value	$ 442	$ 467
Notes payable, interest rate	2.55%	2.55%

XML

Leases - Additional Information (Detail)	Jun. 30, 2021
Minimum
Lessee, Lease, Description [Line Items]
Lessee, operating lease, renewal term (years)	1 year
Maximum
Lessee, Lease, Description [Line Items]
Lessee, operating lease, renewal term (years)	20 years

XML

Leases - Components of Lease Cost (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Lease, Cost [Abstract]
Operating lease cost	$ 23	$ 24	$ 47	$ 48
Sublease income	(1)	(1)	(2)	(2)
Variable lease cost	5	5	10	10
Total lease cost	$ 27	$ 28	$ 55	$ 56

XML

Leases - Operating Leases Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Leases [Abstract]
Cash paid for amounts included in the measurement of operating lease liabilities	$ 28	$ 27	$ 56	$ 53
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 2	$ 11	$ 6	$ 20
Weighted-average remaining lease term (years)	5 years 7 months 6 days	6 years 6 months	5 years 7 months 6 days	6 years 6 months
Weighted-average discount rate applied to operating leases (percent)	3.60%	3.60%	3.60%	3.60%

XML

Leases - Operating Leases, Future Minimum Payment (Detail) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Leases [Abstract]
2021 (After June 30)	$ 55
2022	100
2023	94
2024	85
2025	77
After 2025	117
Total lease payments (undiscounted)	528
Less: Interest	50
Present value of lease liabilities:	478
Lease liabilities - current	92	$ 94
Lease liabilities - noncurrent	$ 386	$ 427

XML

Segment Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2021 segment lineOfBusiness
Segment Reporting Information [Line Items]
Number of operating segments (segment) | segment	2
Number of reportable segments | segment	2
MIS
Segment Reporting Information [Line Items]
Number of lines of businesses | lineOfBusiness	5
MA
Segment Reporting Information [Line Items]
Number of lines of businesses | lineOfBusiness	2

XML

Segment Information - Financial Information by Segment (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Segment Reporting Information, Operating Income (Loss) [Abstract]
Revenue	$ 1,553	$ 1,435	$ 3,153	$ 2,725
Total Expenses	752	725	1,499	1,423
Operating income	801	710	1,654	1,302
Depreciation and amortization	60	58	119	107
Restructuring	0	(2)	2	(3)
Loss pursuant to the divestiture of MAKS	0	0	0	9
Adjusted Operating Income	861	766	1,775	1,415
Eliminations
Segment Reporting Information, Operating Income (Loss) [Abstract]
Revenue	(44)	(37)	(86)	(76)
Total Expenses	(44)	(37)	(86)	(76)
Operating income	0	0	0	0
Depreciation and amortization	0	0	0	0
Restructuring	0	0	0	0
Loss pursuant to the divestiture of MAKS			0	0
Adjusted Operating Income	0	0	0	0
MIS
Segment Reporting Information, Operating Income (Loss) [Abstract]
Revenue	980	938	2,016	1,732
MIS | Operating Segments
Segment Reporting Information, Operating Income (Loss) [Abstract]
Revenue	1,022	973	2,098	1,804
Total Expenses	362	369	728	712
Operating income	660	604	1,370	1,092
Depreciation and amortization	18	19	36	35
Restructuring	0	0	0	(1)
Loss pursuant to the divestiture of MAKS			0	0
Adjusted Operating Income	678	623	1,406	1,126
MA
Segment Reporting Information, Operating Income (Loss) [Abstract]
Revenue	573	497	1,137	993
MA | Operating Segments
Segment Reporting Information, Operating Income (Loss) [Abstract]
Revenue	575	499	1,141	997
Total Expenses	434	393	857	787
Operating income	141	106	284	210
Depreciation and amortization	42	39	83	72
Restructuring	0	(2)	2	(2)
Loss pursuant to the divestiture of MAKS			0	9
Adjusted Operating Income	$ 183	$ 143	$ 369	$ 289

XML

Segment Information - Consolidated Revenue Information by Geographic Area (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Segment Reporting Information [Line Items]
Revenue	$ 1,553	$ 1,435	$ 3,153	$ 2,725
United States
Segment Reporting Information [Line Items]
Revenue	831	837	1,716	1,551
Non-U.S.
Segment Reporting Information [Line Items]
Revenue	722	598	1,437	1,174
EMEA
Segment Reporting Information [Line Items]
Revenue	481	373	959	736
Asia-Pacific
Segment Reporting Information [Line Items]
Revenue	155	144	311	280
Americas
Segment Reporting Information [Line Items]
Revenue	$ 86	$ 81	$ 167	$ 158

XML

Subsequent Events - Additional Information (Detail) - Subsequent Event	Jul. 27, 2021 $ / shares
Subsequent Event [Line Items]
Dividend declared, declaration date	Jul. 27, 2021
Dividend declared, per share (in USD per share)	$ 0.62
Dividend declared, payable date	Sep. 10, 2021
Dividend declared, record date	Aug. 20, 2021

XML

Label	Element	Value
Accounting Standards Update [Extensible Enumeration]	us-gaap_AccountingStandardsUpdateExtensibleList	Accounting Standards Update 2016-13 [Member]