THE BUSINESSWEEK 50 RANKINGS + 25

29

Moody's

It’s no secret the world’s corporations are on a borrowing binge. A flurry of leveraged buyouts and mergers, plus a voracious demand for mortgage-backed securities, is fueling a global surge in bond issuance. That means money in the bank for Moody’s, which draws 80% of its revenue from rating bonds for corporations, government agencies, and the trusts that issue asset-backed bonds. The global appetite for corporate debt in 2006 helped bring about an 18% jump in revenue. The firm also generates 13% of its revenue from publishing research reports. Given Moody’s dominance, CEO Raymond McDaniel clearly has his staff working in top gear. But a slowdown in credit markets could limit growth. In February, Moody’s said revenue growth in 2007 may be in the low double-digits—and that was before the market for subprime bonds began to falter. Additional cracks in the bond market could complicate Moody’s short-term growth story.

Overall Grade

A

Market Data

MCO

Market Value
(2/28/2007)

$18.1 Billion

Profitability*

504.2%

A

Sales Growth Rate**

18.0%

B-

12-Month Sales

$2.0 Billion

12-Month Net Income

$0.8 Billion

Total Return Past 12 Months

-2.9%

Past 36 Months

96.2%

Economic SectorFinancials
IndustrySpecialized Finance
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.
$FOOTNOTE

Raymond W. McDaniel Jr.

Raymond W. McDaniel Jr., 49

CEO since 2005


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Data as of 2/28/07 provided by Standard & Poor's Compustat