the distribution of common financial ratios by rating · pdf filethis paper summarizes the...

Special Comment

New YorkAlbert Metz 1.212.553.1653Richard Cantor

Contact Phone

August 2006

The Distribution of Common Financial Ratios by Rating and Industry For North American Non-Financial Corporations: July 2006

Summary

This paper summarizes the distribution of common financial ratios across industries for North American non-financialnon-utility corporations based on the most recent fiscal year-end data. The body of the text discusses differencesacross industries for Baa rated issuers; however, median financial ratios for each broad rating category for each industry- which may be the primary interest of some readers - are presented in the Appendices.

The metrics reported include interest coverage, asset coverage, leverage, cash flow-to-debt, liquidity, asset returns,profit and revenue stability. Precise definitions are presented in Appendix D. Data are taken from financial statementswith certain adjustments (based on publicly available information). See section I for details.

It must be stressed that this report is not intended to describe Moody's rating process or the particular ratiosfavored in rating committees, but rather uses standard ratios to explore the quantitative content of ratings by industry.Moreover, while some industry- and issuer-specific adjustments have been made to these ratios, they are not always theprecise ratios Moody's analysts use when evaluating a credit.

Ratio analysis is but one part of Moody's analytical process. Qualitative and forward-looking considerations arealso important. Interested readers are referred to Moody's Rating Methodologies for detailed discussions of our ana-lytical approach and core ratios for each industry. In any event, when Moody's does analyze financial ratios, it uses amultivariate approach. As a result, a simple monotonic relationship between ratings and any single ratio should notgenerally be expected.

The report is organized as follows. Section I describes details of the data and methodology. Section II presents abrief review of the distribution of these metrics in the aggregate by rating category - that is, without regard to industryclassification. Results for all Baa rated issuers by industry are presented in Section III, with subsections devoted toeach metric. Section IV contains some brief discussion and analysis.

The Appendices present the detailed statistics in three ways. Each exhibit in Appendix A focuses on a single finan-cial metric and shows how its median values vary across industries and across rating categories. Each exhibit in Appen-dix B focuses on a single industry and shows how its median financial ratios vary across rating categories. Each exhibitin Appendix C presents a single rating category and shows how median financial ratios vary across industries.

Finally, definitions of the credit metrics analyzed in this report are presented in Appendix D. Descriptions of theindustry aggregates are presented in Appendix E.

While it is difficult to draw many broad conclusions, some points to consider are the following:• In the aggregate, there exists a strong monotonic relationship between these metrics and ratings.

– The major exception is Revenue Stability: often weaker credits are characterized by weak (but stable)revenues.

– Liquidity also does not exhibit a strictly monotonic relationship with ratings.• Industries with consistently better-than-average metrics for Baa rated issuers include:

– Construction & Engineering,– Healthcare,– Metals & Mining,– Oil & Gas, and– Technology.

• Industries with consistently weaker than average metrics for Baa issuers include:– Aerospace & Defense,– Energy & Environment,– Media,– Packaging, and– Retail & Distribution.

• The evidence suggests that more intrinsically risky industries (as measured by revenue stability) arerequired to achieve better credit ratios to obtain a given rating.

2 Moody’s Special Comment

Table of ContentsPage

I Data and Methodology................................................................................................................. 4

II Metrics by Rating Category Aggregated Across All Industries ...................................................... 4

III Industry Study ........................................................................................................................... 5III.1 Interest Coverage............................................................................................................................ 6III.2 Asset Coverage............................................................................................................................... 7III.3 Leverage......................................................................................................................................... 8III.4 Cash Flow-to-Debt.......................................................................................................................... 9III.5 Return on Assets........................................................................................................................... 10III.6 Profit............................................................................................................................................. 11III.7 Liquidity........................................................................................................................................ 12III.8 Revenue Stability .......................................................................................................................... 13

IV Discussion............................................................................................................................... 14

Appendix A Detailed Distributions by Credit Metric....................................................................... 16

Appendix B Detailed Distributions by Industry.............................................................................. 24

Appendix C Detailed Distributions by Broad Rating Category........................................................ 35

Appendix D Definition of Financial Metrics ................................................................................... 43

Appendix E Definition of Industry Aggregates............................................................................... 44

Moody’s Special Comment 3

I Data and Methodology

Financial data for this study are taken from the most recently available fiscal year-end filings. The metrics that westudy include interest coverage, asset coverage, leverage, cash flow-to-debt, return on assets, net profit margin, liquid-ity, and revenue stability. Please see Appendix D for definitions. As mentioned above, these are not necessarily theratios that Moody's uses in credit analysis.

When possible, use financial data which incorporate the industry-specific adjustments routinely used by Moody'scredit analysts.1 When such adjusted data are not available for a particular issuer, we us unadjusted data per the defini-tions provided in Appendix D.

All the issuers in the sample carry Moody's bond ratings. The reported ratings refer specifically to the issuer'ssenior unsecured rating or, in the absence of such a rating, its estimated senior unsecured rating as of July 1, 2006.2

Industry classifications are based on proprietary Moody's assignments. For descriptions, please see Appendix E.

II Metrics by Rating Category Aggregated Across All Industries

In this section we examine some of the properties of these metrics in the aggregate, that is, without regard to industrialclassification. In all cases, the statistics we report are medians. We consider the distribution of these metrics by broadrating category.

Exhibit 1 summarizes our findings. We make the following observations:• Most metrics are strictly monotonic with ratings:

– Interest coverage, asset coverage, cash flow-to-debt, return on assets, and profit are strictly increasingacross rating categories. Leverage is strictly decreasing, as expected.

• One metric is generally increasing in ratings:– Median liquidity ratios are slightly lower for Baa than Ba rated issuers, otherwise they are increasing

with ratings.• Only one metric has a weak relationship:

– Median revenue stability ratios peak at the top and bottom of the ratings distribution.

1. For details on particular industry adjustments, please refer to Moody's Global Rating Methodologies.2. Please see "Moody's Senior Ratings Algorithm & Estimated Senior Ratings," July 2005 for a discussion of estimated senior unsecured ratings.

Exhibit 1: Aggregate Metrics by Rating CategoryMedian Median

Aaa-Aa A Baa Ba B Caa-C IG SG

Interest Coverage 16.0 8.6 5.4 3.7 1.9 0.7 6.5 2.1Asset Coverage 3.7 2.4 2.3 2.0 1.3 1.0 2.4 1.4Leverage 31.6% 41.7% 44.8% 49.8% 68.7% 92.2% 43.6% 66.8%Cash Flow-to-Debt 52.4% 32.6% 25.8% 21.6% 12.1% 6.4% 28.4% 12.7%Return on Assets 11.6% 7.5% 5.3% 4.4% 1.7% -2.1% 6.3% 1.9%Profit 11.8% 9.0% 6.7% 5.0% 2.0% -2.6% 7.8% 2.1%Liquidity 7.8% 4.7% 4.0% 4.3% 3.9% 3.3% 4.6% 3.9%Revenue Stability 7.2 7.3 6.1 5.2 6.1 7.3 6.6 5.9

Source: Moody's ratings and financial database as of July 1, 2006


III Industry Study

In this section, we study these financial metrics by industry. We compare ratios for Baa rated issuers only. We do thisnot only to make the presentation tractable, but also because not all industries are represented in all rating categories.For instance, only ten industries are represented in the Aaa-Aa category. The Baa category is the best representedinvestment-grade rating category.

Exhibit 2 lists the industries studies in this report and the number of Baa rated issuers. For descriptions of theseindustry classifications, please see Appendix E.

Exhibit 2: Industry CoverageIndustry Count of Baa Issuers

Aerospace & Defense 4Automotive 4Chemicals 13Construction & Engineering 8Consumer Products 20Energy & Environment 42Healthcare 14Leisure & Entertainment 9Manufacturing 21Media 18Metals & Mining 14Natural Products 7Oil & Gas 12Packaging 4Pharmaceuticals 3Retail & Distribution 21Services 7Technology 4Telecommunications 19Transportation Services 13



III.1 Interest Coverage

Exhibit 3 sorts the industries by their median Baa interest coverage ratio. The complete distribution is presented inthe Appendices. The median aggregate coverage ratios at different rating categories are highlighted for comparison.

From Exhibit 3 we see that for Baa rated issuers, median interest coverage ratios are greatest for the Oil & Gas,Healthcare, and Construction & Engineering industries, exceeding that of the aggregate A rated issuer set. At theother extreme, the median Baa interest coverage ratio is least for the Pharmaceuticals, Telecommunications and Natu-ral Products industries.

While coverage ratios are strictly increasing across ratings in the aggregate, that is true for only nine industries.

Exhibit 3: Median Baa Interest Coverage Ratio


0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0

Aggregate Aaa-AaOil & Gas

HealthcareConstruction & Engineering

Aggregate ATechnology

Metals & MiningAutomotive

ManufacturingChemicals

Consumer ProductsAggregate Baa

ServicesAerospace & Defense

Leisure & EntertainmentRetail & Distribution

Energy & EnvironmentMedia

Aggregate BaTransportation Services

PackagingNatural Products

TelecommunicationsPharmaceuticals

Aggregate BAggregate Caa-C


III.2 Asset Coverage

Exhibit 4 presents median Baa asset coverage ratios by industry. Again, the detailed distributions are reported in theAppendices. Aggregate asset coverage ratios are monotonic within eight industries.

The Metals & Mining and Oil & Gas industries have median Baa asset coverage ratios greater than the Aaa-Aaaggregate. The Media industry has the lowest median asset coverage ratio.

Exhibit 4: Median Baa Asset Coverage Ratios


0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Metals & MiningOil & Gas

Aggregate Aaa-AaAutomotive

Construction & EngineeringTechnology

Transportation ServicesPharmaceuticalsNatural Products

Energy & EnvironmentAggregate A

ChemicalsHealthcare

Aggregate BaaTelecommunications

Leisure & EntertainmentRetail & Distribution

Aggregate BaManufacturing

ServicesPackaging

Consumer ProductsAerospace & Defense

Aggregate BMedia

Aggregate Caa-C


III.3 Leverage

Median Baa leverage ratios are presented in Exhibit 5. For only three industries do median leverage ratios decreasemonotonically with ratings, as they do in the aggregate.

This metric is least for the Metals & Mining and Technology industries, being less than the Aaa-Aa aggregate.Aerospace & Defense and Retail & Distribution have the greatest median leverage ratios for Baa rated issuers.

Exhibit 5: Median Baa Leverage Ratios


0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

Metals & MiningTechnology

Aggregate Aaa-AaOil & Gas

Transportation ServicesNatural Products

AutomotiveHealthcare

Aggregate APharmaceuticals

ManufacturingAggregate Baa

TelecommunicationsConstruction &

MediaServices

ChemicalsEnergy & Environment

Aggregate BaLeisure &

PackagingConsumer ProductsRetail & Distribution

Aerospace & DefenseAggregate B

Aggregate Caa-C


III.4 Cash Flow-to-Debt

Exhibit 6 presents the median Baa cash flow-to-debt ratios by industry. In the aggregate, cash flow-to-debt increasesmonotonically with ratings. That holds true for ten industries.

The Oil & Gas and Technology industries have median cash flow-to-debt ratios that exceed the Aaa-Aa aggregate.On the other hand, the Energy & Environment, Media and Aerospace & Defense industries have the smallest medianratios.

Exhibit 6: Median Baa Cash Flow-to-Debt Ratios


0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

Oil & GasTechnology

Aggregate Aaa-AaMetals & Mining

AutomotiveHealthcare

TelecommunicationsAggregate A

nstruction & EngineeringServices

ManufacturingAggregate Baa

Natural ProductsTransportation ServicesLeisure & Entertainment

ChemicalsAggregate Ba

Retail & DistributionPharmaceuticals

Consumer ProductsPackaging

Aerospace & DefenseMedia

Energy & EnvironmentAggregate B

Aggregate Caa-C


III.5 Return on Assets

Median Baa asset returns are presented in Exhibit 7. In the aggregate, this metric increases monotonically with ratings.That continues to hold true for eight industries.

The Construction & Engineering industry has the highest median asset returns for Baa rated issuers, nearly equal-ing the Aaa-Aa aggregate. Oil & Gas also has much higher than average asset returns. On the other hand, the medianreturn on assets for Baa rated issuers was least in the Pharmaceuticals industry, nearly equal to the B rated aggregate.Media and Natural Products also had fairly low median asset returns.

Exhibit 7: Median Baa Return on Assets

Source: Moody’s ratings and financial database as of July 1, 2006

-4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

Aggregate Aaa-Aa

Construction & Engineering

Oil & Gas

Aggregate A

Metals & Mining

Technology

Leisure & Entertainment

Automotive

Healthcare

Manufacturing

Energy & Environment

Consumer Products

Services

Aggregate Baa

Chemicals

Retail & Distribution

Packaging

Aggregate Ba

Telecommunications

Transportation Services

Aerospace & Defense

Natural Products

Media

Pharmaceuticals

Aggregate B

Aggregate Caa-C


III.6 Profit

Median Baa profit margins are presented in Exhibit 8. While profit margins are monotonically increasing with ratingsin the aggregate, that holds true for only six industries.

Once again, the Oil & Gas industry has the highest values for this metric, exceeding the Aaa-Aa aggregate. Tech-nology, Metals & Mining, and Construction & Engineering also have relatively high median profit margins. As withasset returns, the Pharmaceutical industry has the least median ratio for Baa rated issuers.

Exhibit 8: Median Baa Profit Margins


-5.0% 0.0% 5.0% 10.0% 15.0% 20.0%

Oil & Gas

Aggregate Aaa-Aa

Technology

Metals & Mining


Aggregate A


Healthcare

Services

Media


Aggregate Baa

Telecommunications

Consumer Products

Manufacturing


Automotive

Chemicals

Aggregate Ba

Aerospace & Defense

Packaging


Natural Products

Pharmaceuticals

Aggregate B

Aggregate Caa-C


III.7 Liquidity

Median Baa liquidity ratios are presented in Exhibit 9. While this metric is almost monotonically increasing in theaggregate, that holds true for only one industry: Automotive.

Note that the Pharmaceuticals, Technology, Metals & Mining and Healthcare industries have the greatest medianliquidity metrics, all exceeding the Aaa-Aa aggregate. The Media, Energy & Environment, Transportation Services,Oil & Gas, Telecommunications, Leisure & Entertainment industries are the least liquid among Baa rated issuers, withmedian liquidity actually below the Caa-C Aggregate.

Exhibit 9: Median Baa Liquidity Ratios


0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Pharmaceuticals

Technology

Metals & Mining

Healthcare

Aggregate Aaa-Aa

Automotive


Manufacturing

Chemicals

Consumer Products

Natural Products

Services

Aggregate A

Aerospace & Defense

Packaging


Aggregate Ba

Aggregate Baa

Aggregate B

Aggregate Caa-C


Telecommunications

Oil & Gas



Media


III.8 Revenue Stability

Exhibit 10 presents median revenue stability metrics for Baa rated issuers by industry. Recall that this metric does notcorrelate well with ratings in the aggregate. No individual industry has a monotonic relationship.

The Transportation Services, Consumer Products, Services, Pharmaceuticals, Media, Chemicals, Leisure &Entertainment and Manufacturing industries have the most stable revenues in this rating category, while the Oil &Gas, Construction & Engineering, Metals & Mining, Automotive, Energy & Environment and Telecommunicationsindustries have the least. Of course, in some cases, revenues are less stable precisely because they have been growingvery fast recently.

Exhibit 10: Median Baa Revenue Stability Ratios


0.0 2.0 4.0 6.0 8.0 10.0 12.0


Consumer Products

Services

Pharmaceuticals

Media

Chemicals


Manufacturing

Aggregate Caa-C

Aggregate A

Aggregate Aaa-Aa

Packaging

Natural Products

Aerospace & Defense


Healthcare

Aggregate Baa

Aggregate B

Technology

Aggregate Ba

Telecommunications


Automotive

Metals & Mining


Oil & Gas


IV Discussion

Exhibit 11 summarizes the results presented above. For each metric, we report its standardized (mean 100, standarddeviation 1) value and sort the industries by their average score.3 The Oil & Gas, Technology, Metals & Mining,Healthcare and Construction & Engineering industries have the highest average score, while the Aerospace &Defense, Retail & Distribution, Media, Packaging and Energy & Environment industries have the lowest.

How shall we interpret these results? Recall that these are conditioned on ratings. In other words, Baa rated issu-ers in the Oil & Gas industry generally have stronger (sometimes substantially stronger) metrics than do Baa ratedissuers in the Aerospace & Defense industry.

One interpretation is that observing different levels of, for instance, coverage conditional on having a Baa rating isevidence of different methods or standards in assigning ratings: we observe higher coverage ratios in Oil & Gas thanAerospace & Defense because we hold the former to a higher standard than we do the latter.

The idea is that because one industry is “intrinsically riskier” than another, issuers in that industry must achievebetter credit ratios for a given rating. Consistent with previous research, we find evidence to suggest that this is true.

Using “revenue stability” as a proxy for “intrinsic risk,” the hypothesis is that we should observe better creditratios associated with lower stability within a rating category, in other words, we should observe a negative correlationbetween the credit ratios and sales stability.

Exhibit 12 reports the correlation of the standardized values of each ratio to sales stability. As expected, we obtainnegative correlations for interest coverage (-0.56), asset coverage (-0.61), leverage (-0.39),4 cash flow-to-debt (-0.56),return on assets (-0.63) and profit (-0.54). Liquidity is uncorrelated.

3. We normalize leverage to account for the fact that lesser values are preferable to greater values.

Exhibit 11: Summary of Standardized Baa Metrics

IndustryInterest

CoverageAsset

Coverage Leverage

CashFlow-to-

DebtReturn on

Assets Profit LiquidityRevenueStability Average

Oil & Gas 102.3 101.7 101.3 102.6 101.6 103.0 99.2 98.2 101.2Technology 101.2 100.5 101.9 102.2 100.7 101.3 101.9 99.7 101.2Metals & Mining 100.7 102.8 101.9 101.0 100.8 101.3 101.5 98.5 101.1Healthcare 101.6 99.9 100.4 100.5 100.5 100.3 100.3 99.9 100.4Construction & Engineering 101.3 100.5 100.0 100.1 102.5 100.5 99.6 98.4 100.4Automotive 100.5 100.7 100.4 100.8 100.5 99.5 100.1 99.0 100.2Manufacturing 100.4 99.3 100.1 99.9 100.4 99.8 100.1 100.4 100.0Services 99.6 99.3 99.6 100.0 99.8 100.1 99.8 101.5 100.0Transportation Services 99.2 100.5 100.5 99.5 99.3 100.0 99.1 101.6 100.0Pharmaceuticals 98.6 100.4 100.2 99.4 98.3 98.8 102.8 100.8 99.9Consumer Products 100.0 99.0 99.2 99.3 100.0 99.8 99.8 101.6 99.8Chemicals 100.1 99.9 99.5 99.5 99.8 99.4 99.9 100.5 99.8Leisure & Entertainment 99.5 99.6 99.4 99.5 100.6 99.6 99.3 100.4 99.7Natural Products 99.0 100.4 100.5 99.6 99.0 98.9 99.8 100.3 99.7Telecommunications 98.9 99.6 100.0 100.3 99.3 99.9 99.2 99.3 99.6Energy & Environment 99.4 100.0 99.5 98.9 100.0 100.3 99.1 99.1 99.5Packaging 99.1 99.3 99.2 99.2 99.4 99.2 99.6 100.3 99.4Media 99.4 98.5 100.0 99.2 98.7 100.1 99.0 100.5 99.4Retail & Distribution 99.5 99.4 98.3 99.4 99.6 99.0 100.1 99.9 99.4Aerospace & Defense 99.5 98.9 98.1 99.2 99.2 99.2 99.6 100.1 99.2


4. Recall that these are correlations of the standardized values, hence this negative correlation is to be expected.


This, of course, remains purely suggestive, but it does indicate that industries with less stable revenues arerequired to achieve stronger credit ratios in order to obtain the Baa rating.

Exhibit 12: Correlation of Median Baa Ratios to Revenue StabilityMetric Correlation

Interest Coverage -0.56Asset Coverage -0.61Leverage -0.39Cash Flow-to-Debt -0.56Return on Assets -0.63Profit -0.54Liquidity -0.01



Appendix A Detailed Distributions by Credit Metric

Source: Moody’s Ratings and Financial Database as of July 1, 2006

Exhibit A-1: Median Coverage Ratios

Aaa-Aa A Baa Ba B Caa-C IG SGAggregate 16.0 8.6 5.4 3.7 1.9 0.7 6.5 2.1

n= 22 102 220 186 333 76 344 595

Aerospace & Defense 8.1 4.3 4.3 3.4 0.3 5.8 3.56 4 3 9 1 10 13

Automotive 3.6 6.8 1.7 1.4 0.5 6.3 1.21 4 6 15 8 5 29

Chemicals 6.3 5.7 3.0 1.7 1.0 6.0 2.29 11 10 10 1 20 21

Construction & Engineering 6.3 8.6 5.6 3.7 0.7 8.0 5.01 8 10 3 1 9 14

Consumer Products 14.3 8.4 5.6 3.6 2.1 0.7 7.0 2.26 16 19 10 28 4 41 42

Energy & Environment 6.3 4.1 3.3 1.7 1.8 4.1 1.92 24 14 29 1 26 44

Healthcare 34.7 14.2 9.6 3.8 2.3 1.6 11.4 3.01 4 13 6 24 2 18 32

Leisure & Entertainment 6.4 4.3 2.7 1.3 0.9 5.0 1.82 9 15 30 3 11 48

Manufacturing 12.6 8.5 6.5 5.5 2.0 0.9 7.8 3.42 13 20 15 18 5 35 38

Media 8.7 3.9 1.6 1.4 0.7 5.0 1.26 15 14 20 8 21 42

Metals & Mining 18.0 15.9 7.2 7.1 3.1 -9.0 8.2 3.71 3 11 7 11 2 15 20

Natural Products 6.2 3.1 3.1 1.1 -0.5 3.7 1.33 7 4 11 2 10 17

Oil & Gas 21.7 18.6 11.3 4.9 5.9 2.6 13.7 5.62 6 12 14 18 2 20 34

Packaging 4.9 3.3 3.1 1.5 0.5 3.4 1.51 4 4 10 4 5 18

Pharmaceuticals 19.2 28.7 2.1 27.0 2.0 14.4 11.24 4 3 3 5 11 8

Retail & Distribution 8.2 7.9 4.3 3.9 2.1 1.1 5.3 2.43 7 21 25 36 13 31 74

Services 12.5 4.9 4.6 4.7 2.0 0.2 5.0 2.21 5 6 11 16 4 12 31

Technology 4.6 22.4 8.5 2.3 2.3 0.5 10.0 2.21 6 4 7 17 2 11 26

Telecommunications 4.8 2.9 3.3 0.8 0.2 3.5 0.85 14 3 13 7 19 23

Transportation Services 14.1 5.2 3.5 3.5 1.2 0.8 3.6 1.41 2 11 5 10 6 14 21


Exhibit A-2: Median Asset Coverage Ratios


n= 22 116 255 211 465 134 393 810

Aerospace & Defense 2.6 1.6 1.7 1.4 -0.1 2.4 1.46 4 4 12 1 10 17

Automotive 3.4 3.0 2.1 1.5 1.0 3.0 1.51 4 7 20 11 5 38

Chemicals 2.2 2.4 1.8 1.7 1.0 2.2 1.79 13 12 19 4 22 35




Healthcare 3.6 2.8 2.4 1.6 1.1 1.0 2.4 1.21 4 14 7 30 3 19 40


Manufacturing 4.6 2.2 1.9 2.1 1.0 0.8 2.1 1.12 13 21 16 33 12 36 61

Media 2.1 1.3 0.7 0.6 0.5 1.4 0.66 18 19 39 18 24 76

Metals & Mining 6.9 3.7 4.6 3.9 2.4 46.0 4.6 3.21 3 14 9 11 2 18 22

Natural Products 3.2 2.7 3.8 1.4 1.6 2.9 1.63 7 4 18 3 10 25

Oil & Gas 5.4 5.3 3.7 3.4 3.0 2.3 4.1 3.32 6 12 13 18 3 20 34

Packaging 1.9 1.9 1.6 1.3 0.8 1.9 1.21 4 5 12 6 5 23



Services 15.5 2.8 1.9 1.8 1.1 0.8 2.6 1.11 6 7 13 29 11 14 53

Technology 2.0 9.4 2.9 3.6 2.2 2.0 4.8 2.51 6 4 8 21 2 11 31




Exhibit A-3: Median Leverage Ratios

Aaa-Aa A Baa Ba B Caa-C IG SGAggregate 31.6% 41.7% 44.8% 49.8% 68.7% 92.2% 43.6% 66.8%

n= 22 116 257 212 468 134 395 814

Aerospace & Defense 52.6% 61.2% 55.7% 57.6% 132.2% 54.6% 57.4%6 4 4 12 1 10 17

Automotive 48.1% 41.3% 59.7% 82.0% 83.9% 43.6% 80.2%1 4 7 20 11 5 38

Chemicals 50.8% 49.3% 53.1% 78.0% 118.7% 50.3% 71.4%9 13 12 19 4 22 35

Construction & Engineering 42.0% 45.3% 49.4% 63.5% 120.6% 45.2% 50.1%1 8 10 6 1 9 17

Consumer Products 56.7% 55.4% 52.3% 51.2% 63.5% 107.8% 54.0% 63.5%6 16 20 12 36 9 42 57

Energy & Environment 46.5% 49.4% 46.2% 61.5% 54.7% 49.4% 58.0%4 42 16 37 2 46 55

Healthcare 38.2% 37.5% 41.4% 44.8% 60.7% 53.9% 39.9% 56.0%1 4 14 7 31 3 19 41

Leisure & Entertainment 43.7% 50.2% 64.1% 82.5% 90.3% 50.2% 76.2%2 9 15 46 8 11 69

Manufacturing 22.3% 41.5% 44.3% 44.0% 66.9% 88.3% 43.2% 66.0%2 13 21 16 33 12 36 61

Media 30.8% 45.4% 58.7% 76.0% 101.6% 39.6% 76.5%6 18 19 39 18 24 76

Metals & Mining 22.5% 38.6% 28.4% 42.4% 55.2% 43.6% 28.4% 51.6%1 3 14 9 11 2 18 22

Natural Products 40.4% 41.2% 33.9% 70.9% 81.3% 41.2% 67.6%3 7 4 18 3 10 25

Oil & Gas 25.2% 22.6% 34.2% 38.9% 44.7% 48.6% 28.5% 42.8%2 6 12 14 18 3 20 35

Packaging 53.5% 51.9% 66.7% 80.1% 116.4% 53.5% 80.7%1 4 5 12 6 5 23

Pharmaceuticals 28.3% 33.2% 43.0% 23.2% 56.0% 33.3% 44.9%4 4 3 3 6 11 9

Retail & Distribution 45.5% 46.5% 60.0% 56.4% 70.1% 81.9% 53.7% 67.8%3 8 21 27 42 18 32 87

Services 21.7% 41.2% 49.0% 45.6% 71.5% 115.3% 42.8% 68.7%1 6 7 13 29 11 14 53

Technology 53.6% 16.0% 28.5% 33.8% 45.2% 66.0% 25.1% 42.3%1 6 4 8 22 2 11 32

Telecommunications 54.8% 44.8% 67.6% 74.4% 116.1% 51.3% 84.4%15 19 6 18 10 34 34

Transportation Services 32.8% 41.3% 41.1% 58.2% 66.4% 93.3% 40.6% 70.1%1 2 13 5 13 10 16 28


Exhibit A-4: Median Cash Flow-to-Debt Ratios


n= 22 116 257 212 468 134 395 814

Aerospace & Defense 32.7% 18.1% 19.1% 14.8% -9.1% 24.0% 14.5%6 4 4 12 1 10 17

Automotive 31.0% 40.2% 13.8% 10.1% 4.8% 39.3% 8.6%1 4 7 20 11 5 38

Chemicals 26.8% 22.1% 18.6% 9.4% 6.6% 26.7% 10.1%9 13 12 19 4 22 35




Healthcare 56.7% 45.5% 35.5% 27.4% 17.4% 30.0% 40.7% 19.7%1 4 14 7 31 3 19 41


Manufacturing 63.1% 33.2% 27.5% 24.0% 10.8% 6.7% 30.6% 12.8%2 13 21 16 33 12 36 61

Media 36.6% 17.9% 12.7% 7.8% 6.2% 21.6% 7.8%6 18 19 39 18 24 76

Metals & Mining 104.1% 50.8% 42.5% 40.8% 21.6% -25.5% 46.5% 24.7%1 3 14 9 11 2 18 22


Oil & Gas 80.5% 109.2% 64.9% 35.3% 36.2% 16.9% 67.2% 35.9%2 6 12 14 18 3 20 35

Packaging 20.0% 18.5% 15.7% 10.7% 4.2% 18.8% 9.1%1 4 5 12 6 5 23



Services 83.8% 38.3% 28.4% 26.7% 12.5% 7.2% 37.0% 13.3%1 6 7 13 29 11 14 53

Technology 28.7% 155.0% 59.2% 23.1% 21.9% 14.5% 97.3% 21.4%1 6 4 8 22 2 11 32




Exhibit A-5: Median Asset Returns

Aaa-Aa A Baa Ba B Caa-C IG SGAggregate 11.6% 7.5% 5.3% 4.4% 1.7% -2.1% 6.3% 1.9%

n= 22 116 257 212 466 133 395 811


Automotive 8.5% 6.8% 0.5% 1.0% -4.9% 7.5% 0.3%1 4 7 20 11 5 38

Chemicals 6.3% 5.1% 4.3% 1.9% 0.8% 6.1% 2.2%9 13 12 19 4 22 35

Construction & Engineering 5.0% 11.1% 8.8% 2.3% -3.0% 10.7% 6.4%1 8 10 6 1 9 17

Consumer Products 14.5% 10.0% 5.5% 3.9% 2.4% -3.5% 8.0% 2.2%6 16 20 12 36 9 42 57

Energy & Environment 6.4% 5.6% 4.0% 2.6% -3.8% 5.6% 2.8%4 42 16 37 2 46 55

Healthcare 16.5% 11.7% 6.6% 4.9% 2.6% 0.6% 8.2% 2.7%1 4 14 7 31 3 19 41


Manufacturing 8.6% 8.6% 6.5% 4.8% 2.3% -0.3% 7.2% 3.2%2 13 21 16 33 12 36 61

Media 5.4% 2.7% 1.7% 0.1% -4.3% 3.7% 0.0%6 18 19 39 18 24 76

Metals & Mining 18.8% 16.4% 7.4% 10.9% 0.6% -9.8% 7.7% 5.5%1 3 14 9 11 2 18 22

Natural Products 8.6% 3.4% 3.9% 0.4% -6.5% 4.1% 0.1%3 7 4 18 3 10 25

Oil & Gas 11.9% 13.7% 9.1% 6.5% 6.8% 3.7% 10.4% 6.7%2 6 12 14 18 3 20 35

Packaging 5.5% 4.4% 3.7% 0.0% -3.6% 5.1% -0.3%1 4 5 12 6 5 23

Pharmaceuticals 11.8% 11.5% 2.0% 8.7% -2.0% 10.2% 6.5%4 4 3 3 5 11 8

Retail & Distribution 8.0% 6.7% 4.7% 3.7% 2.4% -0.1% 5.9% 2.6%3 8 21 27 42 18 32 87

Services 3.5% 5.7% 5.3% 4.7% 1.9% -3.1% 5.3% 1.6%1 6 7 13 29 11 14 53

Technology 6.7% 10.7% 7.2% 0.7% -0.1% -3.2% 9.9% 0.0%1 6 4 8 22 2 11 32

Telecommunications 5.0% 4.2% 3.7% -0.6% -3.8% 4.8% -1.2%15 19 6 18 10 34 34

Transportation Services 9.3% 5.6% 4.1% 5.2% 1.3% -0.5% 4.2% 1.0%1 2 13 5 13 10 16 28


Exhibit A-6: Median Profit Margins

Aaa-Aa A Baa Ba B Caa-C IG SGAggregate 11.8% 9.0% 6.7% 5.0% 2.0% -2.6% 7.8% 2.1%

n= 22 116 257 212 467 133 395 812


Automotive 7.1% 5.5% 0.4% 0.8% -6.3% 5.5% 0.2%1 4 7 20 11 5 38

Chemicals 7.8% 5.4% 5.2% 1.4% 0.7% 7.0% 1.7%9 13 12 19 4 22 35

Construction & Engineering 1.7% 9.0% 6.6% 1.4% -2.2% 8.9% 6.0%1 8 10 6 1 9 17

Consumer Products 12.6% 9.0% 6.6% 4.1% 2.6% -3.9% 8.3% 2.4%6 16 20 12 36 9 42 57

Energy & Environment 9.2% 8.4% 10.1% 3.3% -8.2% 8.4% 4.3%4 42 16 37 2 46 55

Healthcare 15.2% 14.2% 8.3% 6.3% 2.7% 0.6% 9.6% 3.8%1 4 14 7 31 3 19 41

Leisure & Entertainment 14.8% 5.8% 9.2% 2.0% -3.9% 6.8% 3.0%2 9 15 45 7 11 67

Manufacturing 10.2% 8.2% 6.4% 3.8% 2.1% -0.6% 7.7% 2.9%2 13 21 16 33 12 36 61

Media 9.4% 7.6% 2.6% 0.3% -9.4% 7.8% 0.0%6 18 19 39 18 24 76

Metals & Mining 27.1% 10.3% 11.6% 9.2% 0.7% -17.2% 11.6% 4.3%1 3 14 9 11 2 18 22

Natural Products 4.7% 3.4% 3.5% 0.1% -5.5% 3.5% 0.1%3 7 4 18 3 10 25

Oil & Gas 8.3% 29.7% 17.5% 17.4% 20.3% 15.4% 17.5% 19.1%2 6 12 14 18 3 20 35

Packaging 4.6% 4.4% 3.6% -0.1% -3.1% 4.6% -0.4%1 4 5 12 6 5 23

Pharmaceuticals 20.0% 17.0% 3.3% 13.9% -0.1% 17.4% 8.4%4 4 3 3 6 11 9

Retail & Distribution 3.5% 5.4% 3.9% 2.6% 1.7% -0.2% 4.4% 1.4%3 8 21 27 42 18 32 87

Services 10.8% 6.7% 7.7% 5.0% 2.9% -3.1% 7.3% 2.7%1 6 7 13 29 11 14 53

Technology 9.1% 10.5% 11.6% 0.5% -0.1% -4.2% 9.1% -0.1%1 6 4 8 22 2 11 32

Telecommunications 11.0% 6.7% 7.4% -2.6% -9.8% 10.2% -1.9%15 19 6 18 10 34 34

Transportation Services 8.8% 16.3% 7.1% 3.3% 2.5% -0.8% 8.7% 1.1%1 2 13 5 13 10 16 28


Exhibit A-7: Median Liquidity Ratios


n= 22 116 257 212 468 134 395 814

Aerospace & Defense 7.0% 4.7% 2.8% 11.7% 0.3% 4.9% 7.2%6 4 4 12 1 10 17

Automotive 25.7% 7.2% 6.4% 3.6% 2.3% 11.3% 3.2%1 4 7 20 11 5 38

Chemicals 1.8% 6.0% 2.6% 3.1% 2.9% 5.1% 2.7%9 13 12 19 4 22 35




Healthcare 5.7% 14.1% 8.2% 6.2% 4.4% 4.6% 9.9% 4.6%1 4 14 7 31 3 19 41


Manufacturing 3.7% 5.9% 7.1% 5.2% 2.5% 3.6% 6.6% 4.2%2 13 21 16 33 12 36 61

Media 2.2% 1.2% 0.7% 2.0% 3.7% 1.3% 1.8%6 18 19 39 18 24 76

Metals & Mining 8.5% 3.9% 14.3% 12.6% 4.8% 21.8% 13.3% 9.7%1 3 14 9 11 2 18 22


Oil & Gas 9.0% 5.0% 2.1% 1.1% 1.1% 1.0% 3.4% 1.0%2 6 12 14 18 3 20 35

Packaging 2.0% 4.5% 1.3% 1.8% 1.0% 3.2% 1.4%1 4 5 12 6 5 23



Services 5.7% 9.3% 5.5% 5.7% 4.2% 3.2% 6.2% 4.2%1 6 7 13 29 11 14 53

Technology 3.9% 28.3% 16.7% 16.8% 19.8% 19.1% 20.0% 19.4%1 6 4 8 22 2 11 32




Exhibit A-8: Median Revenue Stability


n= 22 104 222 186 322 77 348 585

Aerospace & Defense 9.0 6.7 3.1 3.8 2.8 7.7 3.36 4 3 9 1 10 13

Automotive 4.0 4.2 8.6 8.2 14.1 4.1 9.51 4 6 15 9 5 30

Chemicals 6.6 7.6 7.1 6.2 1.5 6.9 6.19 11 10 12 1 20 23




Healthcare 8.2 7.6 6.2 6.5 4.8 19.5 6.6 5.51 4 13 6 24 2 18 32


Manufacturing 7.5 9.3 7.4 5.3 4.7 5.4 7.4 5.12 13 20 15 20 5 35 40

Media 9.1 7.7 4.2 7.1 4.6 9.0 6.56 15 14 20 9 21 43

Metals & Mining 2.5 2.5 2.9 2.9 4.6 6.6 2.7 4.01 3 12 6 8 1 16 15

Natural Products 7.3 7.1 6.1 7.1 3.2 7.2 6.43 7 4 10 2 10 16

Oil & Gas 3.5 2.2 2.3 3.1 2.4 3.4 2.3 2.42 6 12 14 17 2 20 33

Packaging 8.0 7.1 10.2 9.4 9.9 8.0 9.61 4 4 9 4 5 17



Services 11.0 6.7 9.9 5.9 5.4 19.5 8.2 6.11 5 6 10 15 3 12 28

Technology 8.9 4.3 5.7 7.0 6.5 4.9 4.4 6.21 6 4 7 17 2 11 26




Appendix B Detailed Distributions by Industry


Exhibit B-1: Aggregate

Exhibit B-2: Aerospace & Defense

Aaa-Aa 16.0 3.7 31.6% 52.4% 11.6% 11.8% 7.8% 7.2n = 22 22 22 22 22 22 22 22

A 8.6 2.4 41.7% 32.6% 7.5% 9.0% 4.7% 7.3102 116 116 116 116 116 116 104

Baa 5.4 2.3 44.8% 25.8% 5.3% 6.7% 4.0% 6.1220 255 257 257 257 257 257 222

Ba 3.7 2.0 49.8% 21.6% 4.4% 5.0% 4.3% 5.2186 211 212 212 212 212 212 186

B 1.9 1.3 68.7% 12.1% 1.7% 2.0% 3.9% 6.1333 465 468 468 466 467 468 322

Caa-C 0.7 1.0 92.2% 6.4% -2.1% -2.6% 3.3% 7.376 134 134 134 133 133 134 77

Revenue Stability

Return on Assets Profit Liquidity

Interest Coverage

Asset Coverage Leverage

Cash Flow-to-Debt

Aaa-Aan =

A 8.1 2.6 52.6% 32.7% 6.8% 6.0% 7.0% 9.06 6 6 6 6 6 6 6

Baa 4.3 1.6 61.2% 18.1% 3.9% 4.5% 4.7% 6.74 4 4 4 4 4 4 4

Ba 4.3 1.7 55.7% 19.1% 4.7% 4.5% 2.8% 3.13 4 4 4 4 4 4 3

B 3.4 1.4 57.6% 14.8% 3.6% 4.2% 11.7% 3.89 12 12 12 12 12 12 9

Caa-C 0.3 -0.1 132.2% -9.1% -14.1% -19.9% 0.3% 2.81 1 1 1 1 1 1 1

Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit B-3: Automotive

Exhibit B-4: Chemicals

Aaa-Aan =

A 3.6 3.4 48.1% 31.0% 8.5% 7.1% 25.7% 4.01 1 1 1 1 1 1 1

Baa 6.8 3.0 41.3% 40.2% 6.8% 5.5% 7.2% 4.24 4 4 4 4 4 4 4

Ba 1.7 2.1 59.7% 13.8% 0.5% 0.4% 6.4% 8.66 7 7 7 7 7 7 6

B 1.4 1.5 82.0% 10.1% 1.0% 0.8% 3.6% 8.215 20 20 20 20 20 20 15

Caa-C 0.5 1.0 83.9% 4.8% -4.9% -6.3% 2.3% 14.18 11 11 11 11 11 11 9

Revenue Stability


Interest Coverage


Cash Flow-to-Debt

Aaa-Aan =

A 6.3 2.2 50.8% 26.8% 6.3% 7.8% 1.8% 6.69 9 9 9 9 9 9 9

Baa 5.7 2.4 49.3% 22.1% 5.1% 5.4% 6.0% 7.611 13 13 13 13 13 13 11

Ba 3.0 1.8 53.1% 18.6% 4.3% 5.2% 2.6% 7.110 12 12 12 12 12 12 10

B 1.7 1.7 78.0% 9.4% 1.9% 1.4% 3.1% 6.210 19 19 19 19 19 19 12

Caa-C 1.0 1.0 118.7% 6.6% 0.8% 0.7% 2.9% 1.51 4 4 4 4 4 4 1

Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit B-5: Construction & Engineering

Exhibit B-6: Consumer Products

Aaa-Aan =

A 6.3 4.9 42.0% 27.7% 5.0% 1.7% 16.1% 5.61 1 1 1 1 1 1 1

Baa 8.6 2.9 45.3% 30.0% 11.1% 9.0% 4.4% 2.88 7 8 8 8 8 8 7

Ba 5.6 2.5 49.4% 26.7% 8.8% 6.6% 3.4% 2.710 10 10 10 10 10 10 10

B 3.7 2.2 63.5% 15.4% 2.3% 1.4% 16.1% 5.13 6 6 6 6 6 6 3

Caa-C 0.7 1.0 120.6% 2.4% -3.0% -2.2% 0.0% 5.51 1 1 1 1 1 1 1

Revenue Stability


Interest Coverage


Cash Flow-to-Debt

Aaa-Aa 14.3 2.0 56.7% 31.6% 14.5% 12.6% 11.6% 12.0n = 6 6 6 6 6 6 6 6

A 8.4 1.8 55.4% 24.7% 10.0% 9.0% 4.7% 12.716 16 16 16 16 16 16 16

Baa 5.6 1.7 52.3% 19.4% 5.5% 6.6% 5.7% 10.219 20 20 20 20 20 20 20

Ba 3.6 1.8 51.2% 17.4% 3.9% 4.1% 5.1% 8.210 12 12 12 12 12 12 10

B 2.1 1.0 63.5% 13.7% 2.4% 2.6% 3.1% 8.428 36 36 36 36 36 36 24

Caa-C 0.7 0.6 107.8% 1.7% -3.5% -3.9% 1.1% 7.04 9 9 9 9 9 9 5

Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit B-7: Energy & Environment

Exhibit B-8: Healthcare

Aaa-Aan =

A 6.3 2.5 46.5% 31.1% 6.4% 9.2% 6.7% 4.42 4 4 4 4 4 4 2

Baa 4.1 2.5 49.4% 14.3% 5.6% 8.4% 1.7% 4.324 41 42 42 42 42 42 24

Ba 3.3 2.3 46.2% 18.2% 4.0% 10.1% 2.5% 4.314 16 16 16 16 16 16 14

B 1.7 1.7 61.5% 11.1% 2.6% 3.3% 4.6% 4.829 36 37 37 37 37 37 26

Caa-C 1.8 1.6 54.7% 15.6% -3.8% -8.2% 1.0% 1.11 2 2 2 2 2 2 1

Revenue Stability


Interest Coverage


Cash Flow-to-Debt

Aaa-Aa 34.7 3.6 38.2% 56.7% 16.5% 15.2% 5.7% 8.2n = 1 1 1 1 1 1 1 1

A 14.2 2.8 37.5% 45.5% 11.7% 14.2% 14.1% 7.64 4 4 4 4 4 4 4

Baa 9.6 2.4 41.4% 35.5% 6.6% 8.3% 8.2% 6.213 14 14 14 14 14 14 13

Ba 3.8 1.6 44.8% 27.4% 4.9% 6.3% 6.2% 6.56 7 7 7 7 7 7 6

B 2.3 1.1 60.7% 17.4% 2.6% 2.7% 4.4% 4.824 30 31 31 31 31 31 24

Caa-C 1.6 1.0 53.9% 30.0% 0.6% 0.6% 4.6% 19.52 3 3 3 3 3 3 2

Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit B-9: Leisure & Entertainment

Exhibit B-10: Manufacturing

Aaa-Aan =

A 6.4 2.5 43.7% 26.8% 6.4% 14.8% 7.3% 4.92 2 2 2 2 2 2 2

Baa 4.3 2.2 50.2% 22.6% 6.9% 5.8% 3.1% 7.49 9 9 9 9 9 9 9

Ba 2.7 1.7 64.1% 14.9% 4.8% 9.2% 3.6% 6.115 15 15 15 15 15 15 15

B 1.3 1.1 82.5% 9.3% 1.5% 2.0% 5.4% 7.130 46 46 46 45 45 46 30

Caa-C 0.9 0.9 90.3% 6.2% 0.2% -3.9% 4.7% 12.83 8 8 8 7 7 8 3

Revenue Stability


Interest Coverage


Cash Flow-to-Debt

Aaa-Aa 12.6 4.6 22.3% 63.1% 8.6% 10.2% 3.7% 7.5n = 2 2 2 2 2 2 2 2

A 8.5 2.2 41.5% 33.2% 8.6% 8.2% 5.9% 9.313 13 13 13 13 13 13 13

Baa 6.5 1.9 44.3% 27.5% 6.5% 6.4% 7.1% 7.420 21 21 21 21 21 21 20

Ba 5.5 2.1 44.0% 24.0% 4.8% 3.8% 5.2% 5.315 16 16 16 16 16 16 15

B 2.0 1.0 66.9% 10.8% 2.3% 2.1% 2.5% 4.718 33 33 33 33 33 33 20

Caa-C 0.9 0.8 88.3% 6.7% -0.3% -0.6% 3.6% 5.45 12 12 12 12 12 12 5

Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit B-11: Media

Exhibit B-12: Metals & Mining

Aaa-Aan =

A 8.7 2.1 30.8% 36.6% 5.4% 9.4% 2.2% 9.16 6 6 6 6 6 6 6

Baa 3.9 1.3 45.4% 17.9% 2.7% 7.6% 1.2% 7.715 18 18 18 18 18 18 15

Ba 1.6 0.7 58.7% 12.7% 1.7% 2.6% 0.7% 4.214 19 19 19 19 19 19 14

B 1.4 0.6 76.0% 7.8% 0.1% 0.3% 2.0% 7.120 39 39 39 39 39 39 20

Caa-C 0.7 0.5 101.6% 6.2% -4.3% -9.4% 3.7% 4.68 18 18 18 18 18 18 9

Revenue Stability


Interest Coverage


Cash Flow-to-Debt

Aaa-Aa 18.0 6.9 22.5% 104.1% 18.8% 27.1% 8.5% 2.5n = 1 1 1 1 1 1 1 1

A 15.9 3.7 38.6% 50.8% 16.4% 10.3% 3.9% 2.53 3 3 3 3 3 3 3

Baa 7.2 4.6 28.4% 42.5% 7.4% 11.6% 14.3% 2.911 14 14 14 14 14 14 12

Ba 7.1 3.9 42.4% 40.8% 10.9% 9.2% 12.6% 2.97 9 9 9 9 9 9 6

B 3.1 2.4 55.2% 21.6% 0.6% 0.7% 4.8% 4.611 11 11 11 11 11 11 8

Caa-C -9.0 46.0 43.6% -25.5% -9.8% -17.2% 21.8% 6.62 2 2 2 2 2 2 1

Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit B-13: Natural Products

Exhibit B-14: Oil & Gas

Aaa-Aan =

A 6.2 3.2 40.4% 27.0% 8.6% 4.7% 2.7% 7.33 3 3 3 3 3 3 3

Baa 3.1 2.7 41.2% 23.1% 3.4% 3.4% 5.5% 7.17 7 7 7 7 7 7 7

Ba 3.1 3.8 33.9% 22.3% 3.9% 3.5% 5.1% 6.14 4 4 4 4 4 4 4

B 1.1 1.4 70.9% 9.7% 0.4% 0.1% 2.2% 7.111 18 18 18 18 18 18 10

Caa-C -0.5 1.6 81.3% 2.3% -6.5% -5.5% 0.8% 3.22 3 3 3 3 3 3 2

Revenue Stability


Interest Coverage


Cash Flow-to-Debt

Aaa-Aa 21.7 5.4 25.2% 80.5% 11.9% 8.3% 9.0% 3.5n = 2 2 2 2 2 2 2 2

A 18.6 5.3 22.6% 109.2% 13.7% 29.7% 5.0% 2.26 6 6 6 6 6 6 6

Baa 11.3 3.7 34.2% 64.9% 9.1% 17.5% 2.1% 2.312 12 12 12 12 12 12 12

Ba 4.9 3.4 38.9% 35.3% 6.5% 17.4% 1.1% 3.114 13 14 14 14 14 14 14

B 5.9 3.0 44.7% 36.2% 6.8% 20.3% 1.1% 2.418 18 18 18 18 18 18 17

Caa-C 2.6 2.3 48.6% 16.9% 3.7% 15.4% 1.0% 3.42 3 3 3 3 3 3 2

Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit B-15: Packaging

Exhibit B-16: Pharmaceuticals

Aaa-Aan =

A 4.9 1.9 53.5% 20.0% 5.5% 4.6% 2.0% 8.01 1 1 1 1 1 1 1

Baa 3.3 1.9 51.9% 18.5% 4.4% 4.4% 4.5% 7.14 4 4 4 4 4 4 4

Ba 3.1 1.6 66.7% 15.7% 3.7% 3.6% 1.3% 10.24 5 5 5 5 5 5 4

B 1.5 1.3 80.1% 10.7% 0.0% -0.1% 1.8% 9.410 12 12 12 12 12 12 9

Caa-C 0.5 0.8 116.4% 4.2% -3.6% -3.1% 1.0% 9.94 6 6 6 6 6 6 4

Revenue Stability


Interest Coverage


Cash Flow-to-Debt

Aaa-Aa 19.2 3.5 28.3% 41.3% 11.8% 20.0% 22.9% 5.0n = 4 4 4 4 4 4 4 4

A 28.7 3.1 33.2% 56.1% 11.5% 17.0% 18.5% 3.94 4 4 4 4 4 4 4

Baa 2.1 2.8 43.0% 20.4% 2.0% 3.3% 21.3% 8.43 3 3 3 3 3 3 3

Ba 27.0 2.8 23.2% 59.4% 8.7% 13.9% 18.7% 5.73 3 3 3 3 3 3 3

B 2.0 1.3 56.0% 11.8% -2.0% -0.1% 9.2% 5.95 6 6 6 5 6 6 5

Caa-C

Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit B-17: Retail & Distribution

Exhibit B-18: Services

Aaa-Aa 8.2 2.8 45.5% 29.7% 8.0% 3.5% 3.7% 5.9n = 3 3 3 3 3 3 3 3

A 7.9 2.7 46.5% 34.0% 6.7% 5.4% 2.7% 6.27 8 8 8 8 8 8 7

Baa 4.3 2.0 60.0% 21.6% 4.7% 3.9% 7.1% 6.221 21 21 21 21 21 21 21

Ba 3.9 2.0 56.4% 21.0% 3.7% 2.6% 5.9% 5.425 27 27 27 27 27 27 25

B 2.1 1.5 70.1% 12.7% 2.4% 1.7% 2.2% 9.336 42 42 42 42 42 42 35

Caa-C 1.1 1.1 81.9% 8.1% -0.1% -0.2% 3.8% 8.413 18 18 18 18 18 18 14

Revenue Stability


Interest Coverage


Cash Flow-to-Debt

Aaa-Aa 12.5 15.5 21.7% 83.8% 3.5% 10.8% 5.7% 11.0n = 1 1 1 1 1 1 1 1

A 4.9 2.8 41.2% 38.3% 5.7% 6.7% 9.3% 6.75 6 6 6 6 6 6 5

Baa 4.6 1.9 49.0% 28.4% 5.3% 7.7% 5.5% 9.96 7 7 7 7 7 7 6

Ba 4.7 1.8 45.6% 26.7% 4.7% 5.0% 5.7% 5.911 13 13 13 13 13 13 10

B 2.0 1.1 71.5% 12.5% 1.9% 2.9% 4.2% 5.416 29 29 29 29 29 29 15

Caa-C 0.2 0.8 115.3% 7.2% -3.1% -3.1% 3.2% 19.54 11 11 11 11 11 11 3

Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit B-19: Technology

Exhibit B-20: Telecommunications

Aaa-Aa 4.6 2.0 53.6% 28.7% 6.7% 9.1% 3.9% 8.9n = 1 1 1 1 1 1 1 1

A 22.4 9.4 16.0% 155.0% 10.7% 10.5% 28.3% 4.36 6 6 6 6 6 6 6

Baa 8.5 2.9 28.5% 59.2% 7.2% 11.6% 16.7% 5.74 4 4 4 4 4 4 4

Ba 2.3 3.6 33.8% 23.1% 0.7% 0.5% 16.8% 7.07 8 8 8 8 8 8 7

B 2.3 2.2 45.2% 21.9% -0.1% -0.1% 19.8% 6.517 21 22 22 22 22 22 17

Caa-C 0.5 2.0 66.0% 14.5% -3.2% -4.2% 19.1% 4.92 2 2 2 2 2 2 2

Revenue Stability


Interest Coverage


Cash Flow-to-Debt

Aaa-Aan =

A 4.8 2.3 54.8% 28.0% 5.0% 11.0% 1.6% 17.65 15 15 15 15 15 15 7

Baa 2.9 2.2 44.8% 33.3% 4.2% 6.7% 2.4% 4.914 19 19 19 19 19 19 15

Ba 3.3 1.7 67.6% 21.3% 3.7% 7.4% 4.9% 3.73 6 6 6 6 6 6 5

B 0.8 1.1 74.4% 9.8% -0.6% -2.6% 4.5% 4.713 18 18 18 18 18 18 13

Caa-C 0.2 0.7 116.1% 8.2% -3.8% -9.8% 9.1% 6.17 10 10 10 10 10 10 6

Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit B-21: Transportation Services

Aaa-Aa 14.1 3.8 32.8% 54.9% 9.3% 8.8% 7.4% 7.2n = 1 1 1 1 1 1 1 1

A 5.2 2.8 41.3% 26.1% 5.6% 16.3% 5.7% 6.22 2 2 2 2 2 2 2

Baa 3.5 2.8 41.1% 22.6% 4.1% 7.1% 1.9% 10.211 13 13 13 13 13 13 11

Ba 3.5 1.6 58.2% 22.1% 5.2% 3.3% 4.3% 2.55 5 5 5 5 5 5 5

B 1.2 1.8 66.4% 13.4% 1.3% 2.5% 2.7% 7.010 13 13 13 13 13 13 10

Caa-C 0.8 1.3 93.3% 8.4% -0.5% -0.8% 8.0% 7.76 10 10 10 10 10 10 6

Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Appendix C Detailed Distributions by Broad Rating Category


Exhibit C-1: Rating Aaa - Aa

Aggregate 16.0 3.7 31.6% 52.4% 11.6% 11.8% 7.8% 7.2n= 22 22 22 22 22 22 22 22

Aerospace & Defense

Automotive

Chemicals


Consumer Products 14.3 2.0 56.7% 31.6% 14.5% 12.6% 11.6% 12.06 6 6 6 6 6 6 6


Healthcare 34.7 3.6 38.2% 56.7% 16.5% 15.2% 5.7% 8.21 1 1 1 1 1 1 1


Manufacturing 12.6 4.6 22.3% 63.1% 8.6% 10.2% 3.7% 7.52 2 2 2 2 2 2 2

Media

Metals & Mining 18.0 6.9 22.5% 104.1% 18.8% 27.1% 8.5% 2.51 1 1 1 1 1 1 1

Natural Products

Oil & Gas 21.7 5.4 25.2% 80.5% 11.9% 8.3% 9.0% 3.52 2 2 2 2 2 2 2

Packaging

Pharmaceuticals 19.2 3.5 28.3% 41.3% 11.8% 20.0% 22.9% 5.04 4 4 4 4 4 4 4

Retail & Distribution 8.2 2.8 45.5% 29.7% 8.0% 3.5% 3.7% 5.93 3 3 3 3 3 3 3

Services 12.5 15.5 21.7% 83.8% 3.5% 10.8% 5.7% 11.01 1 1 1 1 1 1 1

Technology 4.6 2.0 53.6% 28.7% 6.7% 9.1% 3.9% 8.91 1 1 1 1 1 1 1

Telecommunications

Transportation Services 14.1 3.8 32.8% 54.9% 9.3% 8.8% 7.4% 7.21 1 1 1 1 1 1 1

Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit C-2: Rating A

Aggregate 8.6 2.4 41.7% 32.6% 7.5% 9.0% 4.7% 7.3n= 102 116 116 116 116 116 116 104

Aerospace & Defense 8.1 2.6 52.6% 32.7% 6.8% 6.0% 7.0% 9.06 6 6 6 6 6 6 6

Automotive 3.6 3.4 48.1% 31.0% 8.5% 7.1% 25.7% 4.01 1 1 1 1 1 1 1

Chemicals 6.3 2.2 50.8% 26.8% 6.3% 7.8% 1.8% 6.69 9 9 9 9 9 9 9

Construction & Engineering 6.3 4.9 42.0% 27.7% 5.0% 1.7% 16.1% 5.61 1 1 1 1 1 1 1


Energy & Environment 6.3 2.5 46.5% 31.1% 6.4% 9.2% 6.7% 4.42 4 4 4 4 4 4 2

Healthcare 14.2 2.8 37.5% 45.5% 11.7% 14.2% 14.1% 7.64 4 4 4 4 4 4 4

Leisure & Entertainment 6.4 2.5 43.7% 26.8% 6.4% 14.8% 7.3% 4.92 2 2 2 2 2 2 2

Manufacturing 8.5 2.2 41.5% 33.2% 8.6% 8.2% 5.9% 9.313 13 13 13 13 13 13 13

Media 8.7 2.1 30.8% 36.6% 5.4% 9.4% 2.2% 9.16 6 6 6 6 6 6 6

Metals & Mining 15.9 3.7 38.6% 50.8% 16.4% 10.3% 3.9% 2.53 3 3 3 3 3 3 3

Natural Products 6.2 3.2 40.4% 27.0% 8.6% 4.7% 2.7% 7.33 3 3 3 3 3 3 3

Oil & Gas 18.6 5.3 22.6% 109.2% 13.7% 29.7% 5.0% 2.26 6 6 6 6 6 6 6

Packaging 4.9 1.9 53.5% 20.0% 5.5% 4.6% 2.0% 8.01 1 1 1 1 1 1 1



Services 4.9 2.8 41.2% 38.3% 5.7% 6.7% 9.3% 6.75 6 6 6 6 6 6 5

Technology 22.4 9.4 16.0% 155.0% 10.7% 10.5% 28.3% 4.36 6 6 6 6 6 6 6

Telecommunications 4.8 2.3 54.8% 28.0% 5.0% 11.0% 1.6% 17.65 15 15 15 15 15 15 7


Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit C-3: Rating Baa

Aggregate 5.4 2.3 44.8% 25.8% 5.3% 6.7% 4.0% 6.1n= 220 255 257 257 257 257 257 222


Automotive 6.8 3.0 41.3% 40.2% 6.8% 5.5% 7.2% 4.24 4 4 4 4 4 4 4

Chemicals 5.7 2.4 49.3% 22.1% 5.1% 5.4% 6.0% 7.611 13 13 13 13 13 13 11




Healthcare 9.6 2.4 41.4% 35.5% 6.6% 8.3% 8.2% 6.213 14 14 14 14 14 14 13


Manufacturing 6.5 1.9 44.3% 27.5% 6.5% 6.4% 7.1% 7.420 21 21 21 21 21 21 20

Media 3.9 1.3 45.4% 17.9% 2.7% 7.6% 1.2% 7.715 18 18 18 18 18 18 15

Metals & Mining 7.2 4.6 28.4% 42.5% 7.4% 11.6% 14.3% 2.911 14 14 14 14 14 14 12


Oil & Gas 11.3 3.7 34.2% 64.9% 9.1% 17.5% 2.1% 2.312 12 12 12 12 12 12 12

Packaging 3.3 1.9 51.9% 18.5% 4.4% 4.4% 4.5% 7.14 4 4 4 4 4 4 4



Services 4.6 1.9 49.0% 28.4% 5.3% 7.7% 5.5% 9.96 7 7 7 7 7 7 6

Technology 8.5 2.9 28.5% 59.2% 7.2% 11.6% 16.7% 5.74 4 4 4 4 4 4 4



Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit C-4: Rating Ba

Aggregate 3.7 2.0 49.8% 21.6% 4.4% 5.0% 4.3% 5.2n= 186 211 212 212 212 212 212 186


Automotive 1.7 2.1 59.7% 13.8% 0.5% 0.4% 6.4% 8.66 7 7 7 7 7 7 6

Chemicals 3.0 1.8 53.1% 18.6% 4.3% 5.2% 2.6% 7.110 12 12 12 12 12 12 10




Healthcare 3.8 1.6 44.8% 27.4% 4.9% 6.3% 6.2% 6.56 7 7 7 7 7 7 6


Manufacturing 5.5 2.1 44.0% 24.0% 4.8% 3.8% 5.2% 5.315 16 16 16 16 16 16 15

Media 1.6 0.7 58.7% 12.7% 1.7% 2.6% 0.7% 4.214 19 19 19 19 19 19 14

Metals & Mining 7.1 3.9 42.4% 40.8% 10.9% 9.2% 12.6% 2.97 9 9 9 9 9 9 6


Oil & Gas 4.9 3.4 38.9% 35.3% 6.5% 17.4% 1.1% 3.114 13 14 14 14 14 14 14

Packaging 3.1 1.6 66.7% 15.7% 3.7% 3.6% 1.3% 10.24 5 5 5 5 5 5 4



Services 4.7 1.8 45.6% 26.7% 4.7% 5.0% 5.7% 5.911 13 13 13 13 13 13 10

Technology 2.3 3.6 33.8% 23.1% 0.7% 0.5% 16.8% 7.07 8 8 8 8 8 8 7



Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit C-5: Rating B

Aggregate 1.9 1.3 68.7% 12.1% 1.7% 2.0% 3.9% 6.1n= 333 465 468 468 466 467 468 322


Automotive 1.4 1.5 82.0% 10.1% 1.0% 0.8% 3.6% 8.215 20 20 20 20 20 20 15

Chemicals 1.7 1.7 78.0% 9.4% 1.9% 1.4% 3.1% 6.210 19 19 19 19 19 19 12




Healthcare 2.3 1.1 60.7% 17.4% 2.6% 2.7% 4.4% 4.824 30 31 31 31 31 31 24


Manufacturing 2.0 1.0 66.9% 10.8% 2.3% 2.1% 2.5% 4.718 33 33 33 33 33 33 20

Media 1.4 0.6 76.0% 7.8% 0.1% 0.3% 2.0% 7.120 39 39 39 39 39 39 20

Metals & Mining 3.1 2.4 55.2% 21.6% 0.6% 0.7% 4.8% 4.611 11 11 11 11 11 11 8


Oil & Gas 5.9 3.0 44.7% 36.2% 6.8% 20.3% 1.1% 2.418 18 18 18 18 18 18 17

Packaging 1.5 1.3 80.1% 10.7% 0.0% -0.1% 1.8% 9.410 12 12 12 12 12 12 9

Pharmaceuticals 2.0 1.3 56.0% 11.8% -2.0% -0.1% 9.2% 5.95 6 6 6 5 6 6 5


Services 2.0 1.1 71.5% 12.5% 1.9% 2.9% 4.2% 5.416 29 29 29 29 29 29 15

Technology 2.3 2.2 45.2% 21.9% -0.1% -0.1% 19.8% 6.517 21 22 22 22 22 22 17

Telecommunications 0.8 1.1 74.4% 9.8% -0.6% -2.6% 4.5% 4.713 18 18 18 18 18 18 13


Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit C-6: Rating Caa-C

Aggregate 0.7 1.0 92.2% 6.4% -2.1% -2.6% 3.3% 7.3n= 76 134 134 134 133 133 134 77

Aerospace & Defense 0.3 -0.1 132.2% -9.1% -14.1% -19.9% 0.3% 2.81 1 1 1 1 1 1 1

Automotive 0.5 1.0 83.9% 4.8% -4.9% -6.3% 2.3% 14.18 11 11 11 11 11 11 9

Chemicals 1.0 1.0 118.7% 6.6% 0.8% 0.7% 2.9% 1.51 4 4 4 4 4 4 1

Construction & Engineering 0.7 1.0 120.6% 2.4% -3.0% -2.2% 0.0% 5.51 1 1 1 1 1 1 1

Consumer Products 0.7 0.6 107.8% 1.7% -3.5% -3.9% 1.1% 7.04 9 9 9 9 9 9 5

Energy & Environment 1.8 1.6 54.7% 15.6% -3.8% -8.2% 1.0% 1.11 2 2 2 2 2 2 1

Healthcare 1.6 1.0 53.9% 30.0% 0.6% 0.6% 4.6% 19.52 3 3 3 3 3 3 2

Leisure & Entertainment 0.9 0.9 90.3% 6.2% 0.2% -3.9% 4.7% 12.83 8 8 8 7 7 8 3

Manufacturing 0.9 0.8 88.3% 6.7% -0.3% -0.6% 3.6% 5.45 12 12 12 12 12 12 5

Media 0.7 0.5 101.6% 6.2% -4.3% -9.4% 3.7% 4.68 18 18 18 18 18 18 9

Metals & Mining -9.0 46.0 43.6% -25.5% -9.8% -17.2% 21.8% 6.62 2 2 2 2 2 2 1

Natural Products -0.5 1.6 81.3% 2.3% -6.5% -5.5% 0.8% 3.22 3 3 3 3 3 3 2

Oil & Gas 2.6 2.3 48.6% 16.9% 3.7% 15.4% 1.0% 3.42 3 3 3 3 3 3 2

Packaging 0.5 0.8 116.4% 4.2% -3.6% -3.1% 1.0% 9.94 6 6 6 6 6 6 4

Pharmaceuticals

Retail & Distribution 1.1 1.1 81.9% 8.1% -0.1% -0.2% 3.8% 8.413 18 18 18 18 18 18 14

Services 0.2 0.8 115.3% 7.2% -3.1% -3.1% 3.2% 19.54 11 11 11 11 11 11 3

Technology 0.5 2.0 66.0% 14.5% -3.2% -4.2% 19.1% 4.92 2 2 2 2 2 2 2


Transportation Services 0.8 1.3 93.3% 8.4% -0.5% -0.8% 8.0% 7.76 10 10 10 10 10 10 6

Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit C-7: All Investment-Grade

Aggregate 6.5 2.4 43.6% 28.4% 6.3% 7.8% 4.6% 6.6n= 344 393 395 395 395 395 395 348


Automotive 6.3 3.0 43.6% 39.3% 7.5% 5.5% 11.3% 4.15 5 5 5 5 5 5 5

Chemicals 6.0 2.2 50.3% 26.7% 6.1% 7.0% 5.1% 6.920 22 22 22 22 22 22 20




Healthcare 11.4 2.4 39.9% 40.7% 8.2% 9.6% 9.9% 6.618 19 19 19 19 19 19 18


Manufacturing 7.8 2.1 43.2% 30.6% 7.2% 7.7% 6.6% 7.435 36 36 36 36 36 36 35

Media 5.0 1.4 39.6% 21.6% 3.7% 7.8% 1.3% 9.021 24 24 24 24 24 24 21

Metals & Mining 8.2 4.6 28.4% 46.5% 7.7% 11.6% 13.3% 2.715 18 18 18 18 18 18 16


Oil & Gas 13.7 4.1 28.5% 67.2% 10.4% 17.5% 3.4% 2.320 20 20 20 20 20 20 20

Packaging 3.4 1.9 53.5% 18.8% 5.1% 4.6% 3.2% 8.05 5 5 5 5 5 5 5



Services 5.0 2.6 42.8% 37.0% 5.3% 7.3% 6.2% 8.212 14 14 14 14 14 14 12

Technology 10.0 4.8 25.1% 97.3% 9.9% 9.1% 20.0% 4.411 11 11 11 11 11 11 11



Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Exhibit C-8: All Speculative-Grade

Aggregate 2.1 1.4 66.8% 12.7% 1.9% 2.1% 3.9% 5.9n= 595 810 814 814 811 812 814 585


Automotive 1.2 1.5 80.2% 8.6% 0.3% 0.2% 3.2% 9.529 38 38 38 38 38 38 30

Chemicals 2.2 1.7 71.4% 10.1% 2.2% 1.7% 2.7% 6.121 35 35 35 35 35 35 23




Healthcare 3.0 1.2 56.0% 19.7% 2.7% 3.8% 4.6% 5.532 40 41 41 41 41 41 32


Manufacturing 3.4 1.1 66.0% 12.8% 3.2% 2.9% 4.2% 5.138 61 61 61 61 61 61 40

Media 1.2 0.6 76.5% 7.8% 0.0% 0.0% 1.8% 6.542 76 76 76 76 76 76 43

Metals & Mining 3.7 3.2 51.6% 24.7% 5.5% 4.3% 9.7% 4.020 22 22 22 22 22 22 15


Oil & Gas 5.6 3.3 42.8% 35.9% 6.7% 19.1% 1.0% 2.434 34 35 35 35 35 35 33

Packaging 1.5 1.2 80.7% 9.1% -0.3% -0.4% 1.4% 9.618 23 23 23 23 23 23 17



Services 2.2 1.1 68.7% 13.3% 1.6% 2.7% 4.2% 6.131 53 53 53 53 53 53 28

Technology 2.2 2.5 42.3% 21.4% 0.0% -0.1% 19.4% 6.226 31 32 32 32 32 32 26



Revenue Stability


Interest Coverage


Cash Flow-to-Debt


Appendix D Definition of Financial Metrics

• Interest Coverage:– (EBIT - Interest Capitalized + (1/3)*Rental Expense) / (Interest Expense + (1/3)*Rental Expense +

Preferred Dividends/0.65)• Asset Coverage:

– (Total Assets - Goodwill - Intangibles) / Total Debt• Leverage:

– (Total Debt + 8*Rental Expense) / (Total Debt + 8*Rental Expense + Deferred Taxes + MinorityInterest + Total Equity)

• Cash Flow/Debt:– (Net After-Tax Income Before X-Items + Depreciations - Dividends) / (Total Debt + 8*Rental

Expense)• Return on Assets:

– Net After-Tax Income Before X-Items / 2 Year Average Assets• Profit:

– Net After-Tax Income Before X-Items / Net Sales• Liquidity:

– Cash & Market Securities / Total Assets• Revenue Stability:

– 5 Year Average Net Sales / 5 Year Standard Deviation Net Sales


Appendix E Definition of Industry Aggregates

In this report we study the distribution of financial ratios across 20 industry aggregates. These aggregates are based onproprietary Moody’s coding of broad and specific industry categories. They may generally be described as follows:• Aerospace & Defense

– Aircraft, aerospace and defense equipment and parts manufacturers.• Automotive

– Commercial and passenger automotive and parts manufacturers.• Chemicals

– Agricultural, commodity and specialty chemicals producers.• Construction & Engineering

– Commercial and residential construction, homebuilding.• Consumer Products

– Packaged food and beverage, household and personal care products, apparel and shoes, textiles anddurable consumer products.

• Energy & Environment– (Non-utility) electricity production, merchant energy, oil service and pipeline operators, environmental

services and waste management.• Healthcare

– Hospitals, long-term care facilities, outpatient facilities, medical device manufacturers and medicalservice providers.

• Leisure & Entertainment– Casinos, lodging, restaurants and general amusements.

• Manufacturing– Heavy machinery, building materials, (low technology) component equipment, (non-consumer)

finished products, and transportation equipment manufacturers.• Media

– Book and newspaper publishing, broadcast and subscription radio and television, and diversified media.• Metals & Mining

– Coal and metal mining, aluminum and steel production and recycling.• Natural Products

– Pulp and (non-packaging) paper, wood products, agriculture, protein and tobacco processors.• Oil & Gas

– Oil & gas exploration and production, refining and marketing, and integrated oil companies.• Packaging

– Paper, glass, metal and plastic packaging.• Pharmaceuticals

– General and specialty.• Retail & Distribution

– Grocery stores, drug stores, department stores, general and specialty merchandise retailers, and variouswholesale distributors.

• Services– Business services, consumer services, technology services, and defense services.

• Technology– Computer hardware, software, component equipment, consumer electronics, semiconductor and

contract manufacturers.


• Telecommunications– Wireless, wireline, towers, satellite equipment and services, equipment manufacturers and integrated

telecommunications companies.• Transportation Services

– Equipment leasing, airlines, air freight, railroad and maritime shipping, commuter transportation.


References

Hamilton, D. (2005), “Moody’s Senior Ratings Algorithm & Estimated Senior Ratings,” Moody’s Global CreditResearch, July 2005.Metz, A., et. al. (2004), “The Distribution of Common Financial Ratios by Rating and Industry for North AmericanNon-Financial Corporations,” Moody’s Special Comment, December 2004.Metz, A., et. al. (2006), “The Distribution of Common Financial Ratios by Rating and Industry for North AmericanNon-Financial Corporations,” Moody’s Special Comment, February 2006.


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