Financial Data and Key Metrics Changes - Moody's reported a record year in 2024, with revenue growth of 20% to over $7 billion and a 26% adjusted diluted EPS growth [9][37] - Adjusted operating margin expanded by over 400 basis points, reaching 51.3% in Q4 [9][38] - Q4 revenues were nearly $1.7 billion, up 13% year on year, with adjusted diluted EPS at $2.69, up 20% year on year [37][38] Business Line Data and Key Metrics Changes - Moody's Investors Service (MIS) achieved 18% total revenue growth, with a 29% growth in transactional revenue in Q4 [10][38] - Ratings revenue grew by 33% for the full year, with a 51.3% adjusted operating margin in Q4 [10][38] - Moody's Analytics (MA) reported Q4 revenue of $863 million, up 8% year on year, with recurring revenue growth of 10% [41][40] Market Data and Key Metrics Changes - MIS revenue growth was driven by a 134% increase in leveraged loan issuance activity in Q4 [39] - Strong performance in structured finance, particularly in U.S. CLOs and CMBS, contributed to revenue growth [39] - MA's Decision Solutions segment led with 12% ARR growth, driven by strong demand in banking, insurance, and KYC [41][42] Company Strategy and Development Direction - The company is focusing on strategic investments in technology, including Gen AI, to enhance operational efficiency and market position [13][17] - Moody's aims to capitalize on trends in private credit and transition finance, with significant investments in these areas [15][16] - The company plans to simplify its organizational structure and implement an efficiency program to enhance profitability [52][53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing expansion of debt capital markets and the increasing pace of digital transformation [29][30] - The company anticipates continued strong demand for its services, particularly in understanding financial impacts of extreme weather events [30][34] - Management highlighted the importance of maintaining robust internal controls while pursuing growth opportunities [20][34] Other Important Information - Moody's was named the best rating agency for the thirteenth consecutive year, reinforcing its leadership position in the market [14] - The company plans to incur restructuring charges of $200 to $250 million over two years, with expected annualized cost savings of $250 to $300 million [53] Q&A Session Summary Question: Clarification on medium-term guidance and organic numbers - Management confirmed that the medium-term guidance reflects organic growth, with less reliance on M&A than initially expected [64][67] Question: Insights on MIS margins and earnings growth - Management indicated that higher incentive compensation in 2024 would provide a tailwind for margins in 2025, while continuing investments in efficiency would support long-term growth [69][72] Question: Demand environment and sales cycles in MA - Management noted that sales cycles have not changed materially, with strong new business production and retention rates in 2024 [90][91] Question: Revenue growth expectations despite ARR growth - Management explained that the difference is driven by transactional revenue dynamics, which are expected to narrow as customers migrate to the platform [94][96] Question: Impact of federal government exposure and policy changes - Management stated that federal government exposure is minimal, accounting for less than 1% of consolidated revenue, with potential impacts from policy changes being sector-specific [106][107]

Financial Data and Key Metrics Changes - The company's revenue for 2023 is $3.2 billion, representing a 7% decrease from the previous year [7] - Retail occupancy stands at 97%, office occupancy at 89%, and residential occupancy at 60% [7] - The net gearing ratio is 27.2% with an effective interest rate of 4.2% [17] - The dividend per share for the year is $1.08 [16] Business Line Data and Key Metrics Changes - Retail turnover increased slightly despite 10% of retail space being closed for renovations [5] - The turnover rent grew by 45%, indicating a positive trend in retail performance [10] - The office sector remains under pressure, with occupancy stabilizing at 89% amidst a slow economic recovery [8] Market Data and Key Metrics Changes - The retail sector is experiencing a transformation, with a shift in tourist focus from shopping to experience-based tourism [9] - The demand for high-end retail and medical services has increased, now comprising over 12% of the portfolio [9] Company Strategy and Development Direction - The company is focusing on strategic rejuvenation and diversification of its tenant mix, particularly in high-end retail and service trades [5] - Investments in flexible workspaces are being made to complement the office portfolio [5] - The company is committed to sustainability, achieving a 38% reduction in carbon intensity and maintaining a significant portion of its buildings as green stratified [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the ongoing challenges in the external environment but remains optimistic about retail recovery and tenant demand [4][22] - The luxury retail segment is showing resilience, with increased inquiries from high-end brands for office space [23] - The company aims to reset its dividend policy to conserve cash for future growth opportunities [36][38] Other Important Information - The company has a minimal level of debt maturing in the next year, reducing refinancing pressure [17] - The Lee Garden renovations are expected to enhance rental income significantly, with anticipated increases in rental rates post-renovation [29] Q&A Session Summary Question: What is the retail sales recovery rate in the second half of the year compared to pre-COVID levels? - Management indicated that retail sales growth is positive but not yet back to 2018 levels, with expectations for continued improvement as renovations are completed [21][22] Question: What are the plans regarding a tenant moving out from the office side? - Management noted an increase in inquiries from high-end brands for office space, indicating a positive outlook for tenant demand [23] Question: What is the rationale behind the dividend cut and future dividend policy? - Management explained the need for a conservative approach to conserve cash for future growth opportunities while maintaining a stable and progressive dividend policy [34][36] Question: What is the occupancy cost and rental recovery for Lee Gardens 1 and 5? - The overall occupancy cost is around mid-teens, and management expects a mid-single-digit increase in revenue from the newly renovated areas [52][53] Question: Update on Shanghai's occupancy and future prospects? - Management reported a current occupancy of 30% in Shanghai, with ongoing discussions for an additional 30% to 40% of space, indicating potential for increased occupancy [60][61]