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Nonfinancial corporate regional outlooks mostly negative for 2023 2023

Slowing global growth, high inflation drive outlooks for credit fundamentals
China
» Property sector weakness to continue
North America EMEA » External risks will dampen trade
» Slowing economy, inflation pinch profits » Higher rates weaken financing conditions » Government support will limit downside
Outlook direction Rating » High interest rates reduce demand » Inflation weighs on consumers
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» Stronger than most other regions » Energy costs squeeze margins
Positive Investment-grade (IG) Our rated porfolio at a glance
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73% 27%
Stable Speculative-grade (SG)
Our rated porfolio at a glance Our rated porfolio at a glance
Negative 23% 77 % 33% 67%

EMEA and North America comprise the Aaa-Aa A Baa Ba B Caa Ca-C
bulk of our nonfinancial company ratings Aaa-Aa A Baa Ba B Caa Ca-C Aaa-Aa A Baa Ba B Caa Ca-C 4% 8% 5%

Total number of companies by region 5% 5% 5% 12% 6% 8% 11%

32%
IG SG
25 Hundreds 15% Rating outlooks Rating outlooks

IG SG IG
Rating outlooks
SG
Rating outlooks
Rating outlooks Rating outlooks

88% 63%
20
90% 83%
86% 74%
APAC ex China
Latin America » Continued economic, earnings growth
15
» Unrelenting high inflation restrains growth » Strong demand as countries reopen
» Living costs aggravate societal fissures » Limited refinancing risks, good liquidity
10 » Cyclically strong commodity prices mitigate vulnerabilities
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Our rated porfolio at a glance
Our rated porfolio at a glance 75% 25%
5
29% 71%

0
China APAC* Latin EMEA North Aaa-Aa A Baa Ba B Caa Ca-C
America America Aaa-Aa A Baa Ba B Caa Ca-C
3% 4% 8%
5% 8% 5% 9%
*excluding China
27%
IG SG
IG SG
Rating outlooks
Rating outlooks

Rating outlooks Rating outlooks

93% 65%
87% 86%
*Source: Moody's Investors Service. All data as of 31 December 2022
Our regional outlooks reflect our view of credit fundamentals for nonfinancial companies in these regions over the next 12 months. Sector outlooks are distinct from rating outlooks which, in addition to
sector dynamics, also reflect issuers' specific characteristics and actions. A sector outlook does not represent a sum of upgrades, downgrades or ratings under review, or an average of rating outlook.
 This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the issuer/deal page on https://ratings.moodys.com for the most updated
credit rating action information and rating history.

© 2023 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR

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Non-Financial Corporates: Rating Activity During COVID-19 Top 10 sectors most affected by COVID-19* Mar 1 – Nov 30, 2020 PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
The spread of the coronavirus has placed significant stress on the global economy, but corporate SECTOR % DOWNGRADED WITHIN SECTOR
downgrades reveal a thorough and measured approach to credit during turbulent times. Hotel, Gaming & Leisure 65

Then & Now: the number of speculative grade corporate Majority of downgrades within speculative grade* Advertising, Printing & Publishing 56
MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY

© 2020 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.
issuers pre-COVID-19 was significantly higher versus Total # of downgrades per category, Mar 1 – Nov 30, 2020
pre-2008 credit crisis Transportation: Consumer 54

PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.
942
Speculative Grade
Q4 2007 Q4 2019 Automotive 44
Proportion of publicly Proportion of publicly 583
rated issuers by category rated issuers by category Energy: Oil & Gas 40
66% B

increase in 2019 121

speculative grade Investment Grade Consumer goods: Durable 35
To learn more, read the report

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all
rated issuer count 176 178 For more information, visit moodys.com
54% 46% vs. 2007 63% 37% Retail 35
Ba Caa
91

information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and
Services: Consumer 34
Auto1 sector performance will shape global growth US mass transit: ridership faces a long, slow recovery
Speculative Grade 27 Baa
Investment Grade 2 5 A
88% increase in Media: Diversified & Production 32

due to high interconnectedness

Aaa Aa Ca
B-rated issuers vs. 2007

Recent downgrades represent a small percentage of the total non-financial corporates rated universe*
Fundamental auto trends, including stricter emissions regulation, autonomous driving
Aerospace & Defense 31 The coronavirus pandemic will continue to hurt mass transit systems’ financial performance across the United States.
Lockdowns, unemployment, remotetoworking,
Auto sales unlikely
Calculation reflects percentage of corporate families with at least one downgrade since March 1. Some corporate families include multiple office closures
reach pre-crisis and slowdowns
level before in the retail and leisure industries have led to
mid-2020s
Ridership will grow in 2021...
Year-over-year
Key revenues from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or
validate information received in the credit rating process or in preparing its Publications.
issuers and some issuers have received multiple downgrades. Percentages reflect current number of issuers in each sector; ratings withdrawn
Mar 1 – Nov 30, 2020 since 1 March 2020 are excluded. large drops in ridership, which will not approach pre-pandemic levels for many years. % change
andareconnectivity,
FALLEN ANGELS IN DETAIL “Fallen Angels” entities that move from lead to increasing number of touchpoints with other industries.

© 2020 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.
investment grade to speculative grade
Late cycle reports highlighted corporate credit stress prior to COVID-19 2019
ZF Friedrichshafen AG
Ridership rebounding slower than jobs; multiple factors impeding return to normal service Fares Taxes Federal aid
Total downgrades
-2.7% 0% 9.9 billion 30% 21% 16%
0.9% -20%
1,063
25 Increase in B3s 09 As low-rated spec-grade 29 Loan and bond
MAY heightens market's SEP universe expands, more OCT convergence: investors -30% 20%
2019 vulnerability to a 2019 rated companies will 2019 pave way for lower -1.2% 17.5%R R Ridership % recovered
~30% of total Metals & Mining likelyUtility
default or& -25% R -1.4% Down 53% Down 5.7% $25B one-time

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special,
new default cycle be recoveries in
corporate rated -8.2% 2020*
universe
Rising number of Infrastructure
downgraded in the next downturn 16.2% R 24% -15% J Jobs % recovered in 2020 2020 stimulus
batteries in AFVs
Limitedwill Automakers & Part Suppliers VIEW REPORT next downturn R 18% -10%
7% -52%
Systems
drive demand for cobalt, AFV growth will drive VIEW REPORT
17% -11.8% R 2.5% 4.7 billion
Carnival Corporation
nickel and copper
$337 BN demand for power
VIEW REPORT
30% R -30%
20% 31%
consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any
Speculative Investment Fallen AMER APAC Assets Management Co., Ltd. EMEA and capex
Grade: Grade: Angels:
$209 BN 32% Top ten issuers by ridership numbers
942 86 35 Rated debt outstanding
Company Limited
$1,587 BN -4.4%
Rated debt outstanding -35% NY MTA 2021 *
05 Current weak credit 09 Global CLOs – in a severe 13 The top 10 ways

of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or
38% 11% R 15%
of total SG of total IG
Apache Corporation SEP quality could fuel Caa SEP downturn scenario, credit NOV loan investors are Chicago Transit Authority 28% 6.0 billion
Gap, Inc. (The)
2019 issuers’ defaults in 2019 quality declines 2019 forfeiting protections
9%
rated population rated population
Macy's, Inc.
next downturn significantly, impairing
Los Angeles County MTA Transit riders being
Michael Kors (USA), Inc. Subway riders moving CITY
junior tranches VIEW REPORT
R WMATA to suburbs and locked in due to low

prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.
VIEW REPORT
2019 actual Base case 2020 Base case 2021 MBTA becoming rail riders income and lack of
Exhibit does not include DIC Corporation (APAC) or Wirecard (EMEA) because these ratings have been withdrawn.
VIEW REPORT
15% J 2022* alternate transport
R R SEPTA
About 1% of companies across all rating categories were under review for downgrade at the end of November, about
37% Japan San Francisco MTA
23% 7.4 billion
the same at 1% at the end of October and 8% at the end of April. An additional 30% had negative outlooks.
10%
*Includes all publicly-rated nonfinancial corporate entities; excludes subsidiaries and project US W. Europe
finance-related corporations E. Europe Argentina/Brazil India China
7%
17,100 K 16,309 K 4,115 K 3,105 K 3,528 K 25,769 K 5,129 KBART
J K 4,360 KMARTA
Oil & Gas J12,825 K 11,410 K 3,292 K 2,018 K 2,470 23,200 K
14,900 K 13,406 K 3,951 K 2,321 K 2,964 K 23,780 K 4,665 KDenver RTD 2023*
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to
AFV growth will slow 34% J
53% Long-term migration and
Media & Telco demand for diesel
Number and growth rates represent Moody’s forecast for Light Vehicle Registrations.
20% 8.9 billion usage trends that could
Connectivity will drive and gasoline 30%
Impeding factors SUBURBS reshape mass transit

any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the
demand for bandwidth, Auto sector has significant impact on global economy Traffic congestion
offsetting 5G investment $1,434 BN Global exports totaled $1.3 billion will push people
Technology Rated debt outstanding Public health concerns Aggregate US transit ridership
back onto mass
$1,300 BN Rising use of digital transit
Slow job recovery in key sectors

part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the
* = Projected
Rated debt outstanding systems will spur demand
for chips and software
Temporary and permanent remote work
WorkforceJ% J Manufacturing % Exports % ...but large costs will contribute to Suburban riders Increased car usage
$977 BN
slow return to financial stability in certain cities

information contained herein or the use of or inability to use any such information.
J Remote schools and universities moving further out
Rated debt outstanding
3.8%J 6.1% 43%8.3% 30%
17.7% 14% 21.6% 9.4% 12.6% 22% and become 2x per
US 52% EU Japan J US EU J Japan 44%
US EU Japan Access to alternate transportation Salaries & benefits week rail riders
Younger riders return
60% 44% Potential transit capacity limits COUNTRY to cities for reduced
Fixed costs (pensions, etc)
rent, social / work
Potential service cuts System operations opportunities

Recovery is calculated as the number of jobs/riders added since

the trough in April through September as a percentage of the
number of jobs/riders lost from January to April.
Facility maintenance
Capital projects
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