Financial Case Study on Distribution of Common Financial Ratios

Description
This paper summarizes the distribution of common financial ratios across industries for North American non-financial non-utility corporations based on the most recent fiscal year-end data. The body of the text discusses differences across industries for Baa rated issuers; however, median financial ratios for each broad rating category for each industry

Special Comment
The Distribution of Common Financial Ratios by
Rating and Industry For North American
Non-Financial Corporations: July 2006
Summar y
This paper summarizes the distribution of common financial ratios across industries for North American non-financial
non-utility corporations based on the most recent fiscal year-end data. The body of the text discusses differences
across 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 statements
with 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 ratios
favored 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 the
precise 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 are
also 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 a
multivariate approach. As a result, a simple monotonic relationship between ratings and any single ratio should not
generally be expected.
The report is organized as follows. Section I describes details of the data and methodology. Section II presents a
brief review of the distribution of these metrics in the aggregate by rating category - that is, without regard to industry
classification. Results for all Baa rated issuers by industry are presented in Section III, with subsections devoted to
each 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 exhibit
in Appendix C presents a single rating category and shows how median financial ratios vary across industries.
New York
Albert Metz 1.212.553.1653
Richard Cantor
Contact Phone
August 2006
2 Moody’s Special Comment
Finally, definitions of the credit metrics analyzed in this report are presented in Appendix D. Descriptions of the
industry 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) are
required to achieve better credit ratios to obtain a given rating.

Moody’s Special Comment 3
Table of Contents
Page
I Data and Methodology................................................................................................................. 4
II Metrics by Rating Category Aggregated Across All Industries...................................................... 4
III Industry Study........................................................................................................................... 5
III.1 Interest Coverage............................................................................................................................ 6
III.2 Asset Coverage............................................................................................................................... 7
III.3 Leverage......................................................................................................................................... 8
III.4 Cash Flow-to-Debt.......................................................................................................................... 9
III.5 Return on Assets........................................................................................................................... 10
III.6 Profit............................................................................................................................................. 11
III.7 Liquidity........................................................................................................................................ 12
III.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

4 Moody’s Special Comment
I Dat a and Met hodol ogy
Financial data for this study are taken from the most recently available fiscal year-end filings. The metrics that we
study 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 the
ratios that Moody's uses in credit analysis.
When possible, use financial data which incorporate the industry-specific adjustments routinely used by Moody's
credit 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's
senior 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.
I I Met r i cs by Rat i ng Cat egor y Aggr egat ed Acr oss Al l I ndust r i es
In this section we examine some of the properties of these metrics in the aggregate, that is, without regard to industrial
classification. In all cases, the statistics we report are medians. We consider the distribution of these metrics by broad
rating 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 increasing
across 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 Category
Median 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 2.1
Asset Coverage 3.7 2.4 2.3 2.0 1.3 1.0 2.4 1.4
Leverage 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
Moody’s Special Comment 5
I I I I ndust r y St udy
In this section, we study these financial metrics by industry. We compare ratios for Baa rated issuers only. We do this
not 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 represented
investment-grade rating category.
Exhibit 2 lists the industries studies in this report and the number of Baa rated issuers. For descriptions of these
industry classifications, please see Appendix E.

Exhibit 2: Industry Coverage
Industry Count of Baa Issuers
Aerospace & Defense 4
Automotive 4
Chemicals 13
Construction & Engineering 8
Consumer Products 20
Energy & Environment 42
Healthcare 14
Leisure & Entertainment 9
Manufacturing 21
Media 18
Metals & Mining 14
Natural Products 7
Oil & Gas 12
Packaging 4
Pharmaceuticals 3
Retail & Distribution 21
Services 7
Technology 4
Telecommunications 19
Transportation Services 13
Source: Moody's ratings and financial database as of July 1, 2006
6 Moody’s Special Comment
I I I .1 I nt er est Cover age
Exhibit 3 sorts the industries by their median Baa interest coverage ratio. The complete distribution is presented in
the 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 the
other 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
Source: Moody's ratings and financial database as of July 1, 2006
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0
Aggregate Aaa-Aa
Oil & Gas
Healthcare
Construction & Engineering
Aggregate A
Technology
Metals & Mining
Automotive
Manufacturing
Chemicals
Consumer Products
Aggregate Baa
Services
Aerospace & Defense
Leisure & Entertainment
Retail & Distribution
Energy & Environment
Media
Aggregate Ba
Transportation Services
Packaging
Natural Products
Telecommunications
Pharmaceuticals
Aggregate B
Aggregate Caa-C
Moody’s Special Comment 7
I I I .2 Asset Cover age
Exhibit 4 presents median Baa asset coverage ratios by industry. Again, the detailed distributions are reported in the
Appendices. 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-Aa
aggregate. The Media industry has the lowest median asset coverage ratio.

Exhibit 4: Median Baa Asset Coverage Ratios
Source: Moody's ratings and financial database as of July 1, 2006
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
Metals &Mining
Oil &Gas
Aggregate Aaa-Aa
Automotive
Construction &Engineering
Technology
Transportation Services
Pharmaceuticals
Natural Products
Energy &Environment
Aggregate A
Chemicals
Healthcare
Aggregate Baa
Telecommunications
Leisure &Entertainment
Retail &Distribution
Aggregate Ba
Manufacturing
Services
Packaging
Consumer Products
Aerospace &Defense
Aggregate B
Media
Aggregate Caa-C
8 Moody’s Special Comment
I I I .3 Lever age
Median Baa leverage ratios are presented in Exhibit 5. For only three industries do median leverage ratios decrease
monotonically 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
Source: Moody's ratings and financial database as of July 1, 2006
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%
Metals &Mining
Technology
Aggregate Aaa-Aa
Oil &Gas
Transportation Services
Natural Products
Automotive
Healthcare
Aggregate A
Pharmaceuticals
Manufacturing
Aggregate Baa
Telecommunications
Construction &
Media
Services
Chemicals
Energy &Environment
Aggregate Ba
Leisure &
Packaging
Consumer Products
Retail &Distribution
Aerospace &Defense
Aggregate B
Aggregate Caa-C
Moody’s Special Comment 9
I I I .4 Cash Fl ow - t o- Debt
Exhibit 6 presents the median Baa cash flow-to-debt ratios by industry. In the aggregate, cash flow-to-debt increases
monotonically 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 median
ratios.
Exhibit 6: Median Baa Cash Flow- to- Debt Ratios
Source: Moody's ratings and financial database as of July 1, 2006
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
Oil &Gas
Technology
Aggregate Aaa-Aa
Metals &Mining
Automotive
Healthcare
Telecommunications
Aggregate A
nstruction &Engineering
Services
Manufacturing
Aggregate Baa
Natural Products
Transportation Services
Leisure &Entertainment
Chemicals
Aggregate Ba
Retail &Distribution
Pharmaceuticals
Consumer Products
Packaging
Aerospace &Defense
Media
Energy &Environment
Aggregate B
Aggregate Caa-C
10 Moody’s Special Comment
I I I .5 Ret ur n on Asset s
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 median
return 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
Moody’s Special Comment 11
I I I .6 Pr of i t
Median Baa profit margins are presented in Exhibit 8. While profit margins are monotonically increasing with ratings
in 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 with
asset returns, the Pharmaceutical industry has the least median ratio for Baa rated issuers.
Exhibit 8: Median Baa Profit Margins
Source: Moody’s ratings and financial database as of July 1, 2006
-5.0% 0.0% 5.0% 10.0% 15.0% 20.0%
Oil &Gas
Aggregate Aaa-Aa
Technology
Metals &Mining
Construction &Engineering
Aggregate A
Energy &Environment
Healthcare
Services
Media
Transportation Services
Aggregate Baa
Telecommunications
Consumer Products
Manufacturing
Leisure &Entertainment
Automotive
Chemicals
Aggregate Ba
Aerospace &Defense
Packaging
Retail &Distribution
Natural Products
Pharmaceuticals
Aggregate B
Aggregate Caa-C
12 Moody’s Special Comment
I I I .7 Li qui di t y
Median Baa liquidity ratios are presented in Exhibit 9. While this metric is almost monotonically increasing in the
aggregate, that holds true for only one industry: Automotive.
Note that the Pharmaceuticals, Technology, Metals & Mining and Healthcare industries have the greatest median
liquidity 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, with
median liquidity actually below the Caa-C Aggregate.
Exhibit 9: Median Baa Liquidity Ratios
Source: Moody’s ratings and financial database as of July 1, 2006
0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
Pharmaceuticals
Technology
Metals &Mining
Healthcare
Aggregate Aaa-Aa
Automotive
Retail &Distribution
Manufacturing
Chemicals
Consumer Products
Natural Products
Services
Aggregate A
Aerospace &Defense
Packaging
Construction &Engineering
Aggregate Ba
Aggregate Baa
Aggregate B
Aggregate Caa-C
Leisure &Entertainment
Telecommunications
Oil &Gas
Transportation Services
Energy &Environment
Media
Moody’s Special Comment 13
I I I .8 Revenue St abi l i t y
Exhibit 10 presents median revenue stability metrics for Baa rated issuers by industry. Recall that this metric does not
correlate 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 Telecommunications
industries have the least. Of course, in some cases, revenues are less stable precisely because they have been growing
very fast recently.
Exhibit 10: Median Baa Revenue Stability Ratios
Source: Moody’s ratings and financial database as of July 1, 2006
0.0 2.0 4.0 6.0 8.0 10.0 12.0
Transportation Services
Consumer Products
Services
Pharmaceuticals
Media
Chemicals
Leisure &Entertainment
Manufacturing
Aggregate Caa-C
Aggregate A
Aggregate Aaa-Aa
Packaging
Natural Products
Aerospace &Defense
Retail &Distribution
Healthcare
Aggregate Baa
Aggregate B
Technology
Aggregate Ba
Telecommunications
Energy &Environment
Automotive
Metals &Mining
Construction &Engineering
Oil &Gas
14 Moody’s Special Comment
I V Di scussi on
Exhibit 11 summarizes the results presented above. For each metric, we report its standardized (mean 100, standard
deviation 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 rated
issuers in the Aerospace & Defense industry.
One interpretation is that observing different levels of, for instance, coverage conditional on having a Baa rating is
evidence of different methods or standards in assigning ratings: we observe higher coverage ratios in Oil & Gas than
Aerospace & 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 achieve
better 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 credit
ratios associated with lower stability within a rating category, in other words, we should observe a negative correlation
between the credit ratios and sales stability.
Exhibit 12 reports the correlation of the standardized values of each ratio to sales stability. As expected, we obtain
negative 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
Industry
Interest
Coverage
Asset
Coverage Leverage
Cash
Flow-to-
Debt
Return on
Assets Profit Liquidity
Revenue
Stability Average
Oil & Gas 102.3 101.7 101.3 102.6 101.6 103.0 99.2 98.2 101.2
Technology 101.2 100.5 101.9 102.2 100.7 101.3 101.9 99.7 101.2
Metals & Mining 100.7 102.8 101.9 101.0 100.8 101.3 101.5 98.5 101.1
Healthcare 101.6 99.9 100.4 100.5 100.5 100.3 100.3 99.9 100.4
Construction & Engineering 101.3 100.5 100.0 100.1 102.5 100.5 99.6 98.4 100.4
Automotive 100.5 100.7 100.4 100.8 100.5 99.5 100.1 99.0 100.2
Manufacturing 100.4 99.3 100.1 99.9 100.4 99.8 100.1 100.4 100.0
Services 99.6 99.3 99.6 100.0 99.8 100.1 99.8 101.5 100.0
Transportation Services 99.2 100.5 100.5 99.5 99.3 100.0 99.1 101.6 100.0
Pharmaceuticals 98.6 100.4 100.2 99.4 98.3 98.8 102.8 100.8 99.9
Consumer Products 100.0 99.0 99.2 99.3 100.0 99.8 99.8 101.6 99.8
Chemicals 100.1 99.9 99.5 99.5 99.8 99.4 99.9 100.5 99.8
Leisure & Entertainment 99.5 99.6 99.4 99.5 100.6 99.6 99.3 100.4 99.7
Natural Products 99.0 100.4 100.5 99.6 99.0 98.9 99.8 100.3 99.7
Telecommunications 98.9 99.6 100.0 100.3 99.3 99.9 99.2 99.3 99.6
Energy & Environment 99.4 100.0 99.5 98.9 100.0 100.3 99.1 99.1 99.5
Packaging 99.1 99.3 99.2 99.2 99.4 99.2 99.6 100.3 99.4
Media 99.4 98.5 100.0 99.2 98.7 100.1 99.0 100.5 99.4
Retail & Distribution 99.5 99.4 98.3 99.4 99.6 99.0 100.1 99.9 99.4
Aerospace & Defense 99.5 98.9 98.1 99.2 99.2 99.2 99.6 100.1 99.2
Source: Moody’s ratings and financial database as of July 1, 2006
4. Recall that these are correlations of the standardized values, hence this negative correlation is to be expected.
Moody’s Special Comment 15
This, of course, remains purely suggestive, but it does indicate that industries with less stable revenues are
required to achieve stronger credit ratios in order to obtain the Baa rating.
Exhibit 12: Correlation of Median Baa
Ratios to Revenue Stability
Metric Correlation
Interest Coverage -0.56
Asset Coverage -0.61
Leverage -0.39
Cash Flow-to-Debt -0.56
Return on Assets -0.63
Profit -0.54
Liquidity -0.01
Source: Moody’s ratings and financial database as of July 1, 2006
16 Moody’s Special Comment
Appendi x A Det ai l ed Di st r i but i ons by Cr edi t Met r i c
Source: Moody’s Ratings and Financial Database as of J uly 1, 2006
Exhibit A- 1: Median Coverage Ratios
Aaa- Aa A Baa Ba B Caa- C IG SG
Aggregate 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 3.5
6 4 3 9 1 10 13
Automotive 3.6 6.8 1.7 1.4 0.5 6.3 1.2
1 4 6 15 8 5 29
Chemicals 6.3 5.7 3.0 1.7 1.0 6.0 2.2
9 11 10 10 1 20 21
Construction &Engineering 6.3 8.6 5.6 3.7 0.7 8.0 5.0
1 8 10 3 1 9 14
Consumer Products 14.3 8.4 5.6 3.6 2.1 0.7 7.0 2.2
6 16 19 10 28 4 41 42
Energy &Environment 6.3 4.1 3.3 1.7 1.8 4.1 1.9
2 24 14 29 1 26 44
Healthcare 34.7 14.2 9.6 3.8 2.3 1.6 11.4 3.0
1 4 13 6 24 2 18 32
Leisure &Entertainment 6.4 4.3 2.7 1.3 0.9 5.0 1.8
2 9 15 30 3 11 48
Manufacturing 12.6 8.5 6.5 5.5 2.0 0.9 7.8 3.4
2 13 20 15 18 5 35 38
Media 8.7 3.9 1.6 1.4 0.7 5.0 1.2
6 15 14 20 8 21 42
Metals &Mining 18.0 15.9 7.2 7.1 3.1 -9.0 8.2 3.7
1 3 11 7 11 2 15 20
Natural Products 6.2 3.1 3.1 1.1 -0.5 3.7 1.3
3 7 4 11 2 10 17
Oil &Gas 21.7 18.6 11.3 4.9 5.9 2.6 13.7 5.6
2 6 12 14 18 2 20 34
Packaging 4.9 3.3 3.1 1.5 0.5 3.4 1.5
1 4 4 10 4 5 18
Pharmaceuticals 19.2 28.7 2.1 27.0 2.0 14.4 11.2
4 4 3 3 5 11 8
Retail &Distribution 8.2 7.9 4.3 3.9 2.1 1.1 5.3 2.4
3 7 21 25 36 13 31 74
Services 12.5 4.9 4.6 4.7 2.0 0.2 5.0 2.2
1 5 6 11 16 4 12 31
Technology 4.6 22.4 8.5 2.3 2.3 0.5 10.0 2.2
1 6 4 7 17 2 11 26
Telecommunications 4.8 2.9 3.3 0.8 0.2 3.5 0.8
5 14 3 13 7 19 23
Transportation Services 14.1 5.2 3.5 3.5 1.2 0.8 3.6 1.4
1 2 11 5 10 6 14 21
Moody’s Special Comment 17
Exhibit A- 2: Median Asset Coverage Ratios
Aaa- Aa A Baa Ba B Caa- C IG SG
Aggregate 3.7 2.4 2.3 2.0 1.3 1.0 2.4 1.4
n= 22 116 255 211 465 134 393 810
Aerospace &Defense 2.6 1.6 1.7 1.4 -0.1 2.4 1.4
6 4 4 12 1 10 17
Automotive 3.4 3.0 2.1 1.5 1.0 3.0 1.5
1 4 7 20 11 5 38
Chemicals 2.2 2.4 1.8 1.7 1.0 2.2 1.7
9 13 12 19 4 22 35
Construction &Engineering 4.9 2.9 2.5 2.2 1.0 2.9 2.4
1 7 10 6 1 8 17
Consumer Products 2.0 1.8 1.7 1.8 1.0 0.6 1.9 1.1
6 16 20 12 36 9 42 57
Energy &Environment 2.5 2.5 2.3 1.7 1.6 2.5 1.8
4 41 16 36 2 45 54
Healthcare 3.6 2.8 2.4 1.6 1.1 1.0 2.4 1.2
1 4 14 7 30 3 19 40
Leisure &Entertainment 2.5 2.2 1.7 1.1 0.9 2.2 1.3
2 9 15 46 8 11 69
Manufacturing 4.6 2.2 1.9 2.1 1.0 0.8 2.1 1.1
2 13 21 16 33 12 36 61
Media 2.1 1.3 0.7 0.6 0.5 1.4 0.6
6 18 19 39 18 24 76
Metals &Mining 6.9 3.7 4.6 3.9 2.4 46.0 4.6 3.2
1 3 14 9 11 2 18 22
Natural Products 3.2 2.7 3.8 1.4 1.6 2.9 1.6
3 7 4 18 3 10 25
Oil &Gas 5.4 5.3 3.7 3.4 3.0 2.3 4.1 3.3
2 6 12 13 18 3 20 34
Packaging 1.9 1.9 1.6 1.3 0.8 1.9 1.2
1 4 5 12 6 5 23
Pharmaceuticals 3.5 3.1 2.8 2.8 1.3 2.9 1.6
4 4 3 3 6 11 9
Retail &Distribution 2.8 2.7 2.0 2.0 1.5 1.1 2.2 1.5
3 8 21 27 42 18 32 87
Services 15.5 2.8 1.9 1.8 1.1 0.8 2.6 1.1
1 6 7 13 29 11 14 53
Technology 2.0 9.4 2.9 3.6 2.2 2.0 4.8 2.5
1 6 4 8 21 2 11 31
Telecommunications 2.3 2.2 1.7 1.1 0.7 2.2 1.0
15 19 6 18 10 34 34
Transportation Services 3.8 2.8 2.8 1.6 1.8 1.3 2.9 1.5
1 2 13 5 13 10 16 28
18 Moody’s Special Comment
Exhibit A- 3: Median Leverage Ratios
Aaa- Aa A Baa Ba B Caa- C IG SG
Aggregate 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
Moody’s Special Comment 19
Exhibit A- 4: Median Cash Flow- to- Debt Ratios
Aaa- Aa A Baa Ba B Caa- C IG SG
Aggregate 52.4% 32.6% 25.8% 21.6% 12.1% 6.4% 28.4% 12.7%
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
Construction &Engineering 27.7% 30.0% 26.7% 15.4% 2.4% 27.7% 22.3%
1 8 10 6 1 9 17
Consumer Products 31.6% 24.7% 19.4% 17.4% 13.7% 1.7% 23.9% 12.8%
6 16 20 12 36 9 42 57
Energy &Environment 31.1% 14.3% 18.2% 11.1% 15.6% 14.3% 12.8%
4 42 16 37 2 46 55
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
Leisure &Entertainment 26.8% 22.6% 14.9% 9.3% 6.2% 22.6% 9.9%
2 9 15 46 8 11 69
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
Natural Products 27.0% 23.1% 22.3% 9.7% 2.3% 24.4% 9.9%
3 7 4 18 3 10 25
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
Pharmaceuticals 41.3% 56.1% 20.4% 59.4% 11.8% 35.4% 48.5%
4 4 3 3 6 11 9
Retail &Distribution 29.7% 34.0% 21.6% 21.0% 12.7% 8.1% 24.9% 13.6%
3 8 21 27 42 18 32 87
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
Telecommunications 28.0% 33.3% 21.3% 9.8% 8.2% 29.3% 10.4%
15 19 6 18 10 34 34
Transportation Services 54.9% 26.1% 22.6% 22.1% 13.4% 8.4% 23.0% 12.6%
1 2 13 5 13 10 16 28
20 Moody’s Special Comment
Exhibit A- 5: Median Asset Returns
Aaa- Aa A Baa Ba B Caa- C IG SG
Aggregate 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
Aerospace &Defense 6.8% 3.9% 4.7% 3.6% -14.1% 5.8% 3.8%
6 4 4 12 1 10 17
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
Leisure &Entertainment 6.4% 6.9% 4.8% 1.5% 0.2% 6.9% 1.9%
2 9 15 45 7 11 67
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
Moody’s Special Comment 21
Exhibit A- 6: Median Profit Margins
Aaa- Aa A Baa Ba B Caa- C IG SG
Aggregate 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
Aerospace &Defense 6.0% 4.5% 4.5% 4.2% -19.9% 4.7% 4.0%
6 4 4 12 1 10 17
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
22 Moody’s Special Comment
Exhibit A- 7: Median Liquidity Ratios
Aaa- Aa A Baa Ba B Caa- C IG SG
Aggregate 7.8% 4.7% 4.0% 4.3% 3.9% 3.3% 4.6% 3.9%
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
Construction &Engineering 16.1% 4.4% 3.4% 16.1% 0.0% 5.2% 4.6%
1 8 10 6 1 9 17
Consumer Products 11.6% 4.7% 5.7% 5.1% 3.1% 1.1% 5.7% 3.1%
6 16 20 12 36 9 42 57
Energy &Environment 6.7% 1.7% 2.5% 4.6% 1.0% 1.8% 3.9%
4 42 16 37 2 46 55
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
Leisure &Entertainment 7.3% 3.1% 3.6% 5.4% 4.7% 4.1% 4.7%
2 9 15 46 8 11 69
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
Natural Products 2.7% 5.5% 5.1% 2.2% 0.8% 5.1% 2.4%
3 7 4 18 3 10 25
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
Pharmaceuticals 22.9% 18.5% 21.3% 18.7% 9.2% 20.0% 15.8%
4 4 3 3 6 11 9
Retail &Distribution 3.7% 2.7% 7.1% 5.9% 2.2% 3.8% 4.2% 3.8%
3 8 21 27 42 18 32 87
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
Telecommunications 1.6% 2.4% 4.9% 4.5% 9.1% 1.9% 5.7%
15 19 6 18 10 34 34
Transportation Services 7.4% 5.7% 1.9% 4.3% 2.7% 8.0% 2.1% 4.4%
1 2 13 5 13 10 16 28
Moody’s Special Comment 23
Exhibit A- 8: Median Revenue Stability
Aaa- Aa A Baa Ba B Caa- C IG SG
Aggregate 7.2 7.3 6.1 5.2 6.1 7.3 6.6 5.9
n= 22 104 222 186 322 77 348 585
Aerospace &Defense 9.0 6.7 3.1 3.8 2.8 7.7 3.3
6 4 3 9 1 10 13
Automotive 4.0 4.2 8.6 8.2 14.1 4.1 9.5
1 4 6 15 9 5 30
Chemicals 6.6 7.6 7.1 6.2 1.5 6.9 6.1
9 11 10 12 1 20 23
Construction &Engineering 5.6 2.8 2.7 5.1 5.5 2.9 3.0
1 7 10 3 1 8 14
Consumer Products 12.0 12.7 10.2 8.2 8.4 7.0 11.8 8.2
6 16 20 10 24 5 42 39
Energy &Environment 4.4 4.3 4.3 4.8 1.1 4.3 4.3
2 24 14 26 1 26 41
Healthcare 8.2 7.6 6.2 6.5 4.8 19.5 6.6 5.5
1 4 13 6 24 2 18 32
Leisure &Entertainment 4.9 7.4 6.1 7.1 12.8 7.3 6.8
2 9 15 30 3 11 48
Manufacturing 7.5 9.3 7.4 5.3 4.7 5.4 7.4 5.1
2 13 20 15 20 5 35 40
Media 9.1 7.7 4.2 7.1 4.6 9.0 6.5
6 15 14 20 9 21 43
Metals &Mining 2.5 2.5 2.9 2.9 4.6 6.6 2.7 4.0
1 3 12 6 8 1 16 15
Natural Products 7.3 7.1 6.1 7.1 3.2 7.2 6.4
3 7 4 10 2 10 16
Oil &Gas 3.5 2.2 2.3 3.1 2.4 3.4 2.3 2.4
2 6 12 14 17 2 20 33
Packaging 8.0 7.1 10.2 9.4 9.9 8.0 9.6
1 4 4 9 4 5 17
Pharmaceuticals 5.0 3.9 8.4 5.7 5.9 5.5 5.8
4 4 3 3 5 11 8
Retail &Distribution 5.9 6.2 6.2 5.4 9.3 8.4 6.2 8.3
3 7 21 25 35 14 31 74
Services 11.0 6.7 9.9 5.9 5.4 19.5 8.2 6.1
1 5 6 10 15 3 12 28
Technology 8.9 4.3 5.7 7.0 6.5 4.9 4.4 6.2
1 6 4 7 17 2 11 26
Telecommunications 17.6 4.9 3.7 4.7 6.1 7.9 4.7
7 15 5 13 6 22 24
Transportation Services 7.2 6.2 10.2 2.5 7.0 7.7 8.0 6.9
1 2 11 5 10 6 14 21
24 Moody’s Special Comment
Appendi x B Det ai l ed Di st r i but i ons by I ndust r y
Source: Moody’s ratings and financial database as of J uly 1, 2006
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% 7.2
n = 22 22 22 22 22 22 22 22
A 8.6 2.4 41.7% 32.6% 7.5% 9.0% 4.7% 7.3
102 116 116 116 116 116 116 104
Baa 5.4 2.3 44.8% 25.8% 5.3% 6.7% 4.0% 6.1
220 255 257 257 257 257 257 222
Ba 3.7 2.0 49.8% 21.6% 4.4% 5.0% 4.3% 5.2
186 211 212 212 212 212 212 186
B 1.9 1.3 68.7% 12.1% 1.7% 2.0% 3.9% 6.1
333 465 468 468 466 467 468 322
Caa-C 0.7 1.0 92.2% 6.4% -2.1% -2.6% 3.3% 7.3
76 134 134 134 133 133 134 77
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Aaa-Aa
n =
A 8.1 2.6 52.6% 32.7% 6.8% 6.0% 7.0% 9.0
6 6 6 6 6 6 6 6
Baa 4.3 1.6 61.2% 18.1% 3.9% 4.5% 4.7% 6.7
4 4 4 4 4 4 4 4
Ba 4.3 1.7 55.7% 19.1% 4.7% 4.5% 2.8% 3.1
3 4 4 4 4 4 4 3
B 3.4 1.4 57.6% 14.8% 3.6% 4.2% 11.7% 3.8
9 12 12 12 12 12 12 9
Caa-C 0.3 -0.1 132.2% -9.1% -14.1% -19.9% 0.3% 2.8
1 1 1 1 1 1 1 1
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Moody’s Special Comment 25
Exhibit B- 3: Automotive
Exhibit B- 4: Chemicals
Aaa-Aa
n =
A 3.6 3.4 48.1% 31.0% 8.5% 7.1% 25.7% 4.0
1 1 1 1 1 1 1 1
Baa 6.8 3.0 41.3% 40.2% 6.8% 5.5% 7.2% 4.2
4 4 4 4 4 4 4 4
Ba 1.7 2.1 59.7% 13.8% 0.5% 0.4% 6.4% 8.6
6 7 7 7 7 7 7 6
B 1.4 1.5 82.0% 10.1% 1.0% 0.8% 3.6% 8.2
15 20 20 20 20 20 20 15
Caa-C 0.5 1.0 83.9% 4.8% -4.9% -6.3% 2.3% 14.1
8 11 11 11 11 11 11 9
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Aaa-Aa
n =
A 6.3 2.2 50.8% 26.8% 6.3% 7.8% 1.8% 6.6
9 9 9 9 9 9 9 9
Baa 5.7 2.4 49.3% 22.1% 5.1% 5.4% 6.0% 7.6
11 13 13 13 13 13 13 11
Ba 3.0 1.8 53.1% 18.6% 4.3% 5.2% 2.6% 7.1
10 12 12 12 12 12 12 10
B 1.7 1.7 78.0% 9.4% 1.9% 1.4% 3.1% 6.2
10 19 19 19 19 19 19 12
Caa-C 1.0 1.0 118.7% 6.6% 0.8% 0.7% 2.9% 1.5
1 4 4 4 4 4 4 1
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
26 Moody’s Special Comment
Exhibit B- 5: Construction & Engineering
Exhibit B- 6: Consumer Products
Aaa-Aa
n =
A 6.3 4.9 42.0% 27.7% 5.0% 1.7% 16.1% 5.6
1 1 1 1 1 1 1 1
Baa 8.6 2.9 45.3% 30.0% 11.1% 9.0% 4.4% 2.8
8 7 8 8 8 8 8 7
Ba 5.6 2.5 49.4% 26.7% 8.8% 6.6% 3.4% 2.7
10 10 10 10 10 10 10 10
B 3.7 2.2 63.5% 15.4% 2.3% 1.4% 16.1% 5.1
3 6 6 6 6 6 6 3
Caa-C 0.7 1.0 120.6% 2.4% -3.0% -2.2% 0.0% 5.5
1 1 1 1 1 1 1 1
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Aaa-Aa 14.3 2.0 56.7% 31.6% 14.5% 12.6% 11.6% 12.0
n = 6 6 6 6 6 6 6 6
A 8.4 1.8 55.4% 24.7% 10.0% 9.0% 4.7% 12.7
16 16 16 16 16 16 16 16
Baa 5.6 1.7 52.3% 19.4% 5.5% 6.6% 5.7% 10.2
19 20 20 20 20 20 20 20
Ba 3.6 1.8 51.2% 17.4% 3.9% 4.1% 5.1% 8.2
10 12 12 12 12 12 12 10
B 2.1 1.0 63.5% 13.7% 2.4% 2.6% 3.1% 8.4
28 36 36 36 36 36 36 24
Caa-C 0.7 0.6 107.8% 1.7% -3.5% -3.9% 1.1% 7.0
4 9 9 9 9 9 9 5
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Moody’s Special Comment 27
Exhibit B- 7: Energy & Environment
Exhibit B- 8: Healthcare
Aaa-Aa
n =
A 6.3 2.5 46.5% 31.1% 6.4% 9.2% 6.7% 4.4
2 4 4 4 4 4 4 2
Baa 4.1 2.5 49.4% 14.3% 5.6% 8.4% 1.7% 4.3
24 41 42 42 42 42 42 24
Ba 3.3 2.3 46.2% 18.2% 4.0% 10.1% 2.5% 4.3
14 16 16 16 16 16 16 14
B 1.7 1.7 61.5% 11.1% 2.6% 3.3% 4.6% 4.8
29 36 37 37 37 37 37 26
Caa-C 1.8 1.6 54.7% 15.6% -3.8% -8.2% 1.0% 1.1
1 2 2 2 2 2 2 1
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Aaa-Aa 34.7 3.6 38.2% 56.7% 16.5% 15.2% 5.7% 8.2
n = 1 1 1 1 1 1 1 1
A 14.2 2.8 37.5% 45.5% 11.7% 14.2% 14.1% 7.6
4 4 4 4 4 4 4 4
Baa 9.6 2.4 41.4% 35.5% 6.6% 8.3% 8.2% 6.2
13 14 14 14 14 14 14 13
Ba 3.8 1.6 44.8% 27.4% 4.9% 6.3% 6.2% 6.5
6 7 7 7 7 7 7 6
B 2.3 1.1 60.7% 17.4% 2.6% 2.7% 4.4% 4.8
24 30 31 31 31 31 31 24
Caa-C 1.6 1.0 53.9% 30.0% 0.6% 0.6% 4.6% 19.5
2 3 3 3 3 3 3 2
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
28 Moody’s Special Comment
Exhibit B- 9: Leisure & Entertainment
Exhibit B- 10: Manufacturing
Aaa-Aa
n =
A 6.4 2.5 43.7% 26.8% 6.4% 14.8% 7.3% 4.9
2 2 2 2 2 2 2 2
Baa 4.3 2.2 50.2% 22.6% 6.9% 5.8% 3.1% 7.4
9 9 9 9 9 9 9 9
Ba 2.7 1.7 64.1% 14.9% 4.8% 9.2% 3.6% 6.1
15 15 15 15 15 15 15 15
B 1.3 1.1 82.5% 9.3% 1.5% 2.0% 5.4% 7.1
30 46 46 46 45 45 46 30
Caa-C 0.9 0.9 90.3% 6.2% 0.2% -3.9% 4.7% 12.8
3 8 8 8 7 7 8 3
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Aaa-Aa 12.6 4.6 22.3% 63.1% 8.6% 10.2% 3.7% 7.5
n = 2 2 2 2 2 2 2 2
A 8.5 2.2 41.5% 33.2% 8.6% 8.2% 5.9% 9.3
13 13 13 13 13 13 13 13
Baa 6.5 1.9 44.3% 27.5% 6.5% 6.4% 7.1% 7.4
20 21 21 21 21 21 21 20
Ba 5.5 2.1 44.0% 24.0% 4.8% 3.8% 5.2% 5.3
15 16 16 16 16 16 16 15
B 2.0 1.0 66.9% 10.8% 2.3% 2.1% 2.5% 4.7
18 33 33 33 33 33 33 20
Caa-C 0.9 0.8 88.3% 6.7% -0.3% -0.6% 3.6% 5.4
5 12 12 12 12 12 12 5
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Moody’s Special Comment 29
Exhibit B- 11: Media
Exhibit B- 12: Metals & Mining
Aaa-Aa
n =
A 8.7 2.1 30.8% 36.6% 5.4% 9.4% 2.2% 9.1
6 6 6 6 6 6 6 6
Baa 3.9 1.3 45.4% 17.9% 2.7% 7.6% 1.2% 7.7
15 18 18 18 18 18 18 15
Ba 1.6 0.7 58.7% 12.7% 1.7% 2.6% 0.7% 4.2
14 19 19 19 19 19 19 14
B 1.4 0.6 76.0% 7.8% 0.1% 0.3% 2.0% 7.1
20 39 39 39 39 39 39 20
Caa-C 0.7 0.5 101.6% 6.2% -4.3% -9.4% 3.7% 4.6
8 18 18 18 18 18 18 9
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Aaa-Aa 18.0 6.9 22.5% 104.1% 18.8% 27.1% 8.5% 2.5
n = 1 1 1 1 1 1 1 1
A 15.9 3.7 38.6% 50.8% 16.4% 10.3% 3.9% 2.5
3 3 3 3 3 3 3 3
Baa 7.2 4.6 28.4% 42.5% 7.4% 11.6% 14.3% 2.9
11 14 14 14 14 14 14 12
Ba 7.1 3.9 42.4% 40.8% 10.9% 9.2% 12.6% 2.9
7 9 9 9 9 9 9 6
B 3.1 2.4 55.2% 21.6% 0.6% 0.7% 4.8% 4.6
11 11 11 11 11 11 11 8
Caa-C -9.0 46.0 43.6% -25.5% -9.8% -17.2% 21.8% 6.6
2 2 2 2 2 2 2 1
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
30 Moody’s Special Comment
Exhibit B- 13: Natural Products
Exhibit B- 14: Oil & Gas
Aaa-Aa
n =
A 6.2 3.2 40.4% 27.0% 8.6% 4.7% 2.7% 7.3
3 3 3 3 3 3 3 3
Baa 3.1 2.7 41.2% 23.1% 3.4% 3.4% 5.5% 7.1
7 7 7 7 7 7 7 7
Ba 3.1 3.8 33.9% 22.3% 3.9% 3.5% 5.1% 6.1
4 4 4 4 4 4 4 4
B 1.1 1.4 70.9% 9.7% 0.4% 0.1% 2.2% 7.1
11 18 18 18 18 18 18 10
Caa-C -0.5 1.6 81.3% 2.3% -6.5% -5.5% 0.8% 3.2
2 3 3 3 3 3 3 2
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Aaa-Aa 21.7 5.4 25.2% 80.5% 11.9% 8.3% 9.0% 3.5
n = 2 2 2 2 2 2 2 2
A 18.6 5.3 22.6% 109.2% 13.7% 29.7% 5.0% 2.2
6 6 6 6 6 6 6 6
Baa 11.3 3.7 34.2% 64.9% 9.1% 17.5% 2.1% 2.3
12 12 12 12 12 12 12 12
Ba 4.9 3.4 38.9% 35.3% 6.5% 17.4% 1.1% 3.1
14 13 14 14 14 14 14 14
B 5.9 3.0 44.7% 36.2% 6.8% 20.3% 1.1% 2.4
18 18 18 18 18 18 18 17
Caa-C 2.6 2.3 48.6% 16.9% 3.7% 15.4% 1.0% 3.4
2 3 3 3 3 3 3 2
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Moody’s Special Comment 31
Exhibit B- 15: Packaging
Exhibit B- 16: Pharmaceuticals
Aaa-Aa
n =
A 4.9 1.9 53.5% 20.0% 5.5% 4.6% 2.0% 8.0
1 1 1 1 1 1 1 1
Baa 3.3 1.9 51.9% 18.5% 4.4% 4.4% 4.5% 7.1
4 4 4 4 4 4 4 4
Ba 3.1 1.6 66.7% 15.7% 3.7% 3.6% 1.3% 10.2
4 5 5 5 5 5 5 4
B 1.5 1.3 80.1% 10.7% 0.0% -0.1% 1.8% 9.4
10 12 12 12 12 12 12 9
Caa-C 0.5 0.8 116.4% 4.2% -3.6% -3.1% 1.0% 9.9
4 6 6 6 6 6 6 4
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Aaa-Aa 19.2 3.5 28.3% 41.3% 11.8% 20.0% 22.9% 5.0
n = 4 4 4 4 4 4 4 4
A 28.7 3.1 33.2% 56.1% 11.5% 17.0% 18.5% 3.9
4 4 4 4 4 4 4 4
Baa 2.1 2.8 43.0% 20.4% 2.0% 3.3% 21.3% 8.4
3 3 3 3 3 3 3 3
Ba 27.0 2.8 23.2% 59.4% 8.7% 13.9% 18.7% 5.7
3 3 3 3 3 3 3 3
B 2.0 1.3 56.0% 11.8% -2.0% -0.1% 9.2% 5.9
5 6 6 6 5 6 6 5
Caa-C
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
32 Moody’s Special Comment
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% 5.9
n = 3 3 3 3 3 3 3 3
A 7.9 2.7 46.5% 34.0% 6.7% 5.4% 2.7% 6.2
7 8 8 8 8 8 8 7
Baa 4.3 2.0 60.0% 21.6% 4.7% 3.9% 7.1% 6.2
21 21 21 21 21 21 21 21
Ba 3.9 2.0 56.4% 21.0% 3.7% 2.6% 5.9% 5.4
25 27 27 27 27 27 27 25
B 2.1 1.5 70.1% 12.7% 2.4% 1.7% 2.2% 9.3
36 42 42 42 42 42 42 35
Caa-C 1.1 1.1 81.9% 8.1% -0.1% -0.2% 3.8% 8.4
13 18 18 18 18 18 18 14
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Aaa-Aa 12.5 15.5 21.7% 83.8% 3.5% 10.8% 5.7% 11.0
n = 1 1 1 1 1 1 1 1
A 4.9 2.8 41.2% 38.3% 5.7% 6.7% 9.3% 6.7
5 6 6 6 6 6 6 5
Baa 4.6 1.9 49.0% 28.4% 5.3% 7.7% 5.5% 9.9
6 7 7 7 7 7 7 6
Ba 4.7 1.8 45.6% 26.7% 4.7% 5.0% 5.7% 5.9
11 13 13 13 13 13 13 10
B 2.0 1.1 71.5% 12.5% 1.9% 2.9% 4.2% 5.4
16 29 29 29 29 29 29 15
Caa-C 0.2 0.8 115.3% 7.2% -3.1% -3.1% 3.2% 19.5
4 11 11 11 11 11 11 3
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Moody’s Special Comment 33
Exhibit B- 19: Technology
Exhibit B- 20: Telecommunications
Aaa-Aa 4.6 2.0 53.6% 28.7% 6.7% 9.1% 3.9% 8.9
n = 1 1 1 1 1 1 1 1
A 22.4 9.4 16.0% 155.0% 10.7% 10.5% 28.3% 4.3
6 6 6 6 6 6 6 6
Baa 8.5 2.9 28.5% 59.2% 7.2% 11.6% 16.7% 5.7
4 4 4 4 4 4 4 4
Ba 2.3 3.6 33.8% 23.1% 0.7% 0.5% 16.8% 7.0
7 8 8 8 8 8 8 7
B 2.3 2.2 45.2% 21.9% -0.1% -0.1% 19.8% 6.5
17 21 22 22 22 22 22 17
Caa-C 0.5 2.0 66.0% 14.5% -3.2% -4.2% 19.1% 4.9
2 2 2 2 2 2 2 2
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Aaa-Aa
n =
A 4.8 2.3 54.8% 28.0% 5.0% 11.0% 1.6% 17.6
5 15 15 15 15 15 15 7
Baa 2.9 2.2 44.8% 33.3% 4.2% 6.7% 2.4% 4.9
14 19 19 19 19 19 19 15
Ba 3.3 1.7 67.6% 21.3% 3.7% 7.4% 4.9% 3.7
3 6 6 6 6 6 6 5
B 0.8 1.1 74.4% 9.8% -0.6% -2.6% 4.5% 4.7
13 18 18 18 18 18 18 13
Caa-C 0.2 0.7 116.1% 8.2% -3.8% -9.8% 9.1% 6.1
7 10 10 10 10 10 10 6
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
34 Moody’s Special Comment
Exhibit B- 21: Transportation Services
Aaa-Aa 14.1 3.8 32.8% 54.9% 9.3% 8.8% 7.4% 7.2
n = 1 1 1 1 1 1 1 1
A 5.2 2.8 41.3% 26.1% 5.6% 16.3% 5.7% 6.2
2 2 2 2 2 2 2 2
Baa 3.5 2.8 41.1% 22.6% 4.1% 7.1% 1.9% 10.2
11 13 13 13 13 13 13 11
Ba 3.5 1.6 58.2% 22.1% 5.2% 3.3% 4.3% 2.5
5 5 5 5 5 5 5 5
B 1.2 1.8 66.4% 13.4% 1.3% 2.5% 2.7% 7.0
10 13 13 13 13 13 13 10
Caa-C 0.8 1.3 93.3% 8.4% -0.5% -0.8% 8.0% 7.7
6 10 10 10 10 10 10 6
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow- to-
Debt
Moody’s Special Comment 35
Appendi x C Det ai l ed Di st r i but i ons by Br oad Rat i ng Cat egor y
Source: Moody’s ratings and financial database as of J uly 1, 2006
Exhibit C- 1: Rating Aaa - Aa
Aggregate 16.0 3.7 31.6% 52.4% 11.6% 11.8% 7.8% 7.2
n= 22 22 22 22 22 22 22 22
Aerospace &Defense
Automotive
Chemicals
Construction &Engineering
Consumer Products 14.3 2.0 56.7% 31.6% 14.5% 12.6% 11.6% 12.0
6 6 6 6 6 6 6 6
Energy &Environment
Healthcare 34.7 3.6 38.2% 56.7% 16.5% 15.2% 5.7% 8.2
1 1 1 1 1 1 1 1
Leisure &Entertainment
Manufacturing 12.6 4.6 22.3% 63.1% 8.6% 10.2% 3.7% 7.5
2 2 2 2 2 2 2 2
Media
Metals &Mining 18.0 6.9 22.5% 104.1% 18.8% 27.1% 8.5% 2.5
1 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% 3.5
2 2 2 2 2 2 2 2
Packaging
Pharmaceuticals 19.2 3.5 28.3% 41.3% 11.8% 20.0% 22.9% 5.0
4 4 4 4 4 4 4 4
Retail &Distribution 8.2 2.8 45.5% 29.7% 8.0% 3.5% 3.7% 5.9
3 3 3 3 3 3 3 3
Services 12.5 15.5 21.7% 83.8% 3.5% 10.8% 5.7% 11.0
1 1 1 1 1 1 1 1
Technology 4.6 2.0 53.6% 28.7% 6.7% 9.1% 3.9% 8.9
1 1 1 1 1 1 1 1
Telecommunications
Transportation Services 14.1 3.8 32.8% 54.9% 9.3% 8.8% 7.4% 7.2
1 1 1 1 1 1 1 1
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow-
to- Debt
36 Moody’s Special Comment
Exhibit C- 2: Rating A
Aggregate 8.6 2.4 41.7% 32.6% 7.5% 9.0% 4.7% 7.3
n= 102 116 116 116 116 116 116 104
Aerospace &Defense 8.1 2.6 52.6% 32.7% 6.8% 6.0% 7.0% 9.0
6 6 6 6 6 6 6 6
Automotive 3.6 3.4 48.1% 31.0% 8.5% 7.1% 25.7% 4.0
1 1 1 1 1 1 1 1
Chemicals 6.3 2.2 50.8% 26.8% 6.3% 7.8% 1.8% 6.6
9 9 9 9 9 9 9 9
Construction &Engineering 6.3 4.9 42.0% 27.7% 5.0% 1.7% 16.1% 5.6
1 1 1 1 1 1 1 1
Consumer Products 8.4 1.8 55.4% 24.7% 10.0% 9.0% 4.7% 12.7
16 16 16 16 16 16 16 16
Energy &Environment 6.3 2.5 46.5% 31.1% 6.4% 9.2% 6.7% 4.4
2 4 4 4 4 4 4 2
Healthcare 14.2 2.8 37.5% 45.5% 11.7% 14.2% 14.1% 7.6
4 4 4 4 4 4 4 4
Leisure &Entertainment 6.4 2.5 43.7% 26.8% 6.4% 14.8% 7.3% 4.9
2 2 2 2 2 2 2 2
Manufacturing 8.5 2.2 41.5% 33.2% 8.6% 8.2% 5.9% 9.3
13 13 13 13 13 13 13 13
Media 8.7 2.1 30.8% 36.6% 5.4% 9.4% 2.2% 9.1
6 6 6 6 6 6 6 6
Metals &Mining 15.9 3.7 38.6% 50.8% 16.4% 10.3% 3.9% 2.5
3 3 3 3 3 3 3 3
Natural Products 6.2 3.2 40.4% 27.0% 8.6% 4.7% 2.7% 7.3
3 3 3 3 3 3 3 3
Oil &Gas 18.6 5.3 22.6% 109.2% 13.7% 29.7% 5.0% 2.2
6 6 6 6 6 6 6 6
Packaging 4.9 1.9 53.5% 20.0% 5.5% 4.6% 2.0% 8.0
1 1 1 1 1 1 1 1
Pharmaceuticals 28.7 3.1 33.2% 56.1% 11.5% 17.0% 18.5% 3.9
4 4 4 4 4 4 4 4
Retail &Distribution 7.9 2.7 46.5% 34.0% 6.7% 5.4% 2.7% 6.2
7 8 8 8 8 8 8 7
Services 4.9 2.8 41.2% 38.3% 5.7% 6.7% 9.3% 6.7
5 6 6 6 6 6 6 5
Technology 22.4 9.4 16.0% 155.0% 10.7% 10.5% 28.3% 4.3
6 6 6 6 6 6 6 6
Telecommunications 4.8 2.3 54.8% 28.0% 5.0% 11.0% 1.6% 17.6
5 15 15 15 15 15 15 7
Transportation Services 5.2 2.8 41.3% 26.1% 5.6% 16.3% 5.7% 6.2
2 2 2 2 2 2 2 2
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow-
to- Debt
Moody’s Special Comment 37
Exhibit C- 3: Rating Baa
Aggregate 5.4 2.3 44.8% 25.8% 5.3% 6.7% 4.0% 6.1
n= 220 255 257 257 257 257 257 222
Aerospace &Defense 4.3 1.6 61.2% 18.1% 3.9% 4.5% 4.7% 6.7
4 4 4 4 4 4 4 4
Automotive 6.8 3.0 41.3% 40.2% 6.8% 5.5% 7.2% 4.2
4 4 4 4 4 4 4 4
Chemicals 5.7 2.4 49.3% 22.1% 5.1% 5.4% 6.0% 7.6
11 13 13 13 13 13 13 11
Construction &Engineering 8.6 2.9 45.3% 30.0% 11.1% 9.0% 4.4% 2.8
8 7 8 8 8 8 8 7
Consumer Products 5.6 1.7 52.3% 19.4% 5.5% 6.6% 5.7% 10.2
19 20 20 20 20 20 20 20
Energy &Environment 4.1 2.5 49.4% 14.3% 5.6% 8.4% 1.7% 4.3
24 41 42 42 42 42 42 24
Healthcare 9.6 2.4 41.4% 35.5% 6.6% 8.3% 8.2% 6.2
13 14 14 14 14 14 14 13
Leisure &Entertainment 4.3 2.2 50.2% 22.6% 6.9% 5.8% 3.1% 7.4
9 9 9 9 9 9 9 9
Manufacturing 6.5 1.9 44.3% 27.5% 6.5% 6.4% 7.1% 7.4
20 21 21 21 21 21 21 20
Media 3.9 1.3 45.4% 17.9% 2.7% 7.6% 1.2% 7.7
15 18 18 18 18 18 18 15
Metals &Mining 7.2 4.6 28.4% 42.5% 7.4% 11.6% 14.3% 2.9
11 14 14 14 14 14 14 12
Natural Products 3.1 2.7 41.2% 23.1% 3.4% 3.4% 5.5% 7.1
7 7 7 7 7 7 7 7
Oil &Gas 11.3 3.7 34.2% 64.9% 9.1% 17.5% 2.1% 2.3
12 12 12 12 12 12 12 12
Packaging 3.3 1.9 51.9% 18.5% 4.4% 4.4% 4.5% 7.1
4 4 4 4 4 4 4 4
Pharmaceuticals 2.1 2.8 43.0% 20.4% 2.0% 3.3% 21.3% 8.4
3 3 3 3 3 3 3 3
Retail &Distribution 4.3 2.0 60.0% 21.6% 4.7% 3.9% 7.1% 6.2
21 21 21 21 21 21 21 21
Services 4.6 1.9 49.0% 28.4% 5.3% 7.7% 5.5% 9.9
6 7 7 7 7 7 7 6
Technology 8.5 2.9 28.5% 59.2% 7.2% 11.6% 16.7% 5.7
4 4 4 4 4 4 4 4
Telecommunications 2.9 2.2 44.8% 33.3% 4.2% 6.7% 2.4% 4.9
14 19 19 19 19 19 19 15
Transportation Services 3.5 2.8 41.1% 22.6% 4.1% 7.1% 1.9% 10.2
11 13 13 13 13 13 13 11
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow-
to- Debt
38 Moody’s Special Comment
Exhibit C- 4: Rating Ba
Aggregate 3.7 2.0 49.8% 21.6% 4.4% 5.0% 4.3% 5.2
n= 186 211 212 212 212 212 212 186
Aerospace &Defense 4.3 1.7 55.7% 19.1% 4.7% 4.5% 2.8% 3.1
3 4 4 4 4 4 4 3
Automotive 1.7 2.1 59.7% 13.8% 0.5% 0.4% 6.4% 8.6
6 7 7 7 7 7 7 6
Chemicals 3.0 1.8 53.1% 18.6% 4.3% 5.2% 2.6% 7.1
10 12 12 12 12 12 12 10
Construction &Engineering 5.6 2.5 49.4% 26.7% 8.8% 6.6% 3.4% 2.7
10 10 10 10 10 10 10 10
Consumer Products 3.6 1.8 51.2% 17.4% 3.9% 4.1% 5.1% 8.2
10 12 12 12 12 12 12 10
Energy &Environment 3.3 2.3 46.2% 18.2% 4.0% 10.1% 2.5% 4.3
14 16 16 16 16 16 16 14
Healthcare 3.8 1.6 44.8% 27.4% 4.9% 6.3% 6.2% 6.5
6 7 7 7 7 7 7 6
Leisure &Entertainment 2.7 1.7 64.1% 14.9% 4.8% 9.2% 3.6% 6.1
15 15 15 15 15 15 15 15
Manufacturing 5.5 2.1 44.0% 24.0% 4.8% 3.8% 5.2% 5.3
15 16 16 16 16 16 16 15
Media 1.6 0.7 58.7% 12.7% 1.7% 2.6% 0.7% 4.2
14 19 19 19 19 19 19 14
Metals &Mining 7.1 3.9 42.4% 40.8% 10.9% 9.2% 12.6% 2.9
7 9 9 9 9 9 9 6
Natural Products 3.1 3.8 33.9% 22.3% 3.9% 3.5% 5.1% 6.1
4 4 4 4 4 4 4 4
Oil &Gas 4.9 3.4 38.9% 35.3% 6.5% 17.4% 1.1% 3.1
14 13 14 14 14 14 14 14
Packaging 3.1 1.6 66.7% 15.7% 3.7% 3.6% 1.3% 10.2
4 5 5 5 5 5 5 4
Pharmaceuticals 27.0 2.8 23.2% 59.4% 8.7% 13.9% 18.7% 5.7
3 3 3 3 3 3 3 3
Retail &Distribution 3.9 2.0 56.4% 21.0% 3.7% 2.6% 5.9% 5.4
25 27 27 27 27 27 27 25
Services 4.7 1.8 45.6% 26.7% 4.7% 5.0% 5.7% 5.9
11 13 13 13 13 13 13 10
Technology 2.3 3.6 33.8% 23.1% 0.7% 0.5% 16.8% 7.0
7 8 8 8 8 8 8 7
Telecommunications 3.3 1.7 67.6% 21.3% 3.7% 7.4% 4.9% 3.7
3 6 6 6 6 6 6 5
Transportation Services 3.5 1.6 58.2% 22.1% 5.2% 3.3% 4.3% 2.5
5 5 5 5 5 5 5 5
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow-
to- Debt
Moody’s Special Comment 39
Exhibit C- 5: Rating B
Aggregate 1.9 1.3 68.7% 12.1% 1.7% 2.0% 3.9% 6.1
n= 333 465 468 468 466 467 468 322
Aerospace &Defense 3.4 1.4 57.6% 14.8% 3.6% 4.2% 11.7% 3.8
9 12 12 12 12 12 12 9
Automotive 1.4 1.5 82.0% 10.1% 1.0% 0.8% 3.6% 8.2
15 20 20 20 20 20 20 15
Chemicals 1.7 1.7 78.0% 9.4% 1.9% 1.4% 3.1% 6.2
10 19 19 19 19 19 19 12
Construction &Engineering 3.7 2.2 63.5% 15.4% 2.3% 1.4% 16.1% 5.1
3 6 6 6 6 6 6 3
Consumer Products 2.1 1.0 63.5% 13.7% 2.4% 2.6% 3.1% 8.4
28 36 36 36 36 36 36 24
Energy &Environment 1.7 1.7 61.5% 11.1% 2.6% 3.3% 4.6% 4.8
29 36 37 37 37 37 37 26
Healthcare 2.3 1.1 60.7% 17.4% 2.6% 2.7% 4.4% 4.8
24 30 31 31 31 31 31 24
Leisure &Entertainment 1.3 1.1 82.5% 9.3% 1.5% 2.0% 5.4% 7.1
30 46 46 46 45 45 46 30
Manufacturing 2.0 1.0 66.9% 10.8% 2.3% 2.1% 2.5% 4.7
18 33 33 33 33 33 33 20
Media 1.4 0.6 76.0% 7.8% 0.1% 0.3% 2.0% 7.1
20 39 39 39 39 39 39 20
Metals &Mining 3.1 2.4 55.2% 21.6% 0.6% 0.7% 4.8% 4.6
11 11 11 11 11 11 11 8
Natural Products 1.1 1.4 70.9% 9.7% 0.4% 0.1% 2.2% 7.1
11 18 18 18 18 18 18 10
Oil &Gas 5.9 3.0 44.7% 36.2% 6.8% 20.3% 1.1% 2.4
18 18 18 18 18 18 18 17
Packaging 1.5 1.3 80.1% 10.7% 0.0% -0.1% 1.8% 9.4
10 12 12 12 12 12 12 9
Pharmaceuticals 2.0 1.3 56.0% 11.8% -2.0% -0.1% 9.2% 5.9
5 6 6 6 5 6 6 5
Retail &Distribution 2.1 1.5 70.1% 12.7% 2.4% 1.7% 2.2% 9.3
36 42 42 42 42 42 42 35
Services 2.0 1.1 71.5% 12.5% 1.9% 2.9% 4.2% 5.4
16 29 29 29 29 29 29 15
Technology 2.3 2.2 45.2% 21.9% -0.1% -0.1% 19.8% 6.5
17 21 22 22 22 22 22 17
Telecommunications 0.8 1.1 74.4% 9.8% -0.6% -2.6% 4.5% 4.7
13 18 18 18 18 18 18 13
Transportation Services 1.2 1.8 66.4% 13.4% 1.3% 2.5% 2.7% 7.0
10 13 13 13 13 13 13 10
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow-
to- Debt
40 Moody’s Special Comment
Exhibit C- 6: Rating Caa- C
Aggregate 0.7 1.0 92.2% 6.4% - 2.1% - 2.6% 3.3% 7.3
n= 76 134 134 134 133 133 134 77
Aerospace &Defense 0.3 -0.1 132.2% -9.1% -14.1% -19.9% 0.3% 2.8
1 1 1 1 1 1 1 1
Automotive 0.5 1.0 83.9% 4.8% -4.9% -6.3% 2.3% 14.1
8 11 11 11 11 11 11 9
Chemicals 1.0 1.0 118.7% 6.6% 0.8% 0.7% 2.9% 1.5
1 4 4 4 4 4 4 1
Construction &Engineering 0.7 1.0 120.6% 2.4% -3.0% -2.2% 0.0% 5.5
1 1 1 1 1 1 1 1
Consumer Products 0.7 0.6 107.8% 1.7% -3.5% -3.9% 1.1% 7.0
4 9 9 9 9 9 9 5
Energy &Environment 1.8 1.6 54.7% 15.6% -3.8% -8.2% 1.0% 1.1
1 2 2 2 2 2 2 1
Healthcare 1.6 1.0 53.9% 30.0% 0.6% 0.6% 4.6% 19.5
2 3 3 3 3 3 3 2
Leisure &Entertainment 0.9 0.9 90.3% 6.2% 0.2% -3.9% 4.7% 12.8
3 8 8 8 7 7 8 3
Manufacturing 0.9 0.8 88.3% 6.7% -0.3% -0.6% 3.6% 5.4
5 12 12 12 12 12 12 5
Media 0.7 0.5 101.6% 6.2% -4.3% -9.4% 3.7% 4.6
8 18 18 18 18 18 18 9
Metals &Mining -9.0 46.0 43.6% -25.5% -9.8% -17.2% 21.8% 6.6
2 2 2 2 2 2 2 1
Natural Products -0.5 1.6 81.3% 2.3% -6.5% -5.5% 0.8% 3.2
2 3 3 3 3 3 3 2
Oil &Gas 2.6 2.3 48.6% 16.9% 3.7% 15.4% 1.0% 3.4
2 3 3 3 3 3 3 2
Packaging 0.5 0.8 116.4% 4.2% -3.6% -3.1% 1.0% 9.9
4 6 6 6 6 6 6 4
Pharmaceuticals
Retail &Distribution 1.1 1.1 81.9% 8.1% -0.1% -0.2% 3.8% 8.4
13 18 18 18 18 18 18 14
Services 0.2 0.8 115.3% 7.2% -3.1% -3.1% 3.2% 19.5
4 11 11 11 11 11 11 3
Technology 0.5 2.0 66.0% 14.5% -3.2% -4.2% 19.1% 4.9
2 2 2 2 2 2 2 2
Telecommunications 0.2 0.7 116.1% 8.2% -3.8% -9.8% 9.1% 6.1
7 10 10 10 10 10 10 6
Transportation Services 0.8 1.3 93.3% 8.4% -0.5% -0.8% 8.0% 7.7
6 10 10 10 10 10 10 6
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow-
to- Debt
Moody’s Special Comment 41
Exhibit C- 7: All Investment- Grade
Aggregate 6.5 2.4 43.6% 28.4% 6.3% 7.8% 4.6% 6.6
n= 344 393 395 395 395 395 395 348
Aerospace &Defense 5.8 2.4 54.6% 24.0% 5.8% 4.7% 4.9% 7.7
10 10 10 10 10 10 10 10
Automotive 6.3 3.0 43.6% 39.3% 7.5% 5.5% 11.3% 4.1
5 5 5 5 5 5 5 5
Chemicals 6.0 2.2 50.3% 26.7% 6.1% 7.0% 5.1% 6.9
20 22 22 22 22 22 22 20
Construction &Engineering 8.0 2.9 45.2% 27.7% 10.7% 8.9% 5.2% 2.9
9 8 9 9 9 9 9 8
Consumer Products 7.0 1.9 54.0% 23.9% 8.0% 8.3% 5.7% 11.8
41 42 42 42 42 42 42 42
Energy &Environment 4.1 2.5 49.4% 14.3% 5.6% 8.4% 1.8% 4.3
26 45 46 46 46 46 46 26
Healthcare 11.4 2.4 39.9% 40.7% 8.2% 9.6% 9.9% 6.6
18 19 19 19 19 19 19 18
Leisure &Entertainment 5.0 2.2 50.2% 22.6% 6.9% 6.8% 4.1% 7.3
11 11 11 11 11 11 11 11
Manufacturing 7.8 2.1 43.2% 30.6% 7.2% 7.7% 6.6% 7.4
35 36 36 36 36 36 36 35
Media 5.0 1.4 39.6% 21.6% 3.7% 7.8% 1.3% 9.0
21 24 24 24 24 24 24 21
Metals &Mining 8.2 4.6 28.4% 46.5% 7.7% 11.6% 13.3% 2.7
15 18 18 18 18 18 18 16
Natural Products 3.7 2.9 41.2% 24.4% 4.1% 3.5% 5.1% 7.2
10 10 10 10 10 10 10 10
Oil &Gas 13.7 4.1 28.5% 67.2% 10.4% 17.5% 3.4% 2.3
20 20 20 20 20 20 20 20
Packaging 3.4 1.9 53.5% 18.8% 5.1% 4.6% 3.2% 8.0
5 5 5 5 5 5 5 5
Pharmaceuticals 14.4 2.9 33.3% 35.4% 10.2% 17.4% 20.0% 5.5
11 11 11 11 11 11 11 11
Retail &Distribution 5.3 2.2 53.7% 24.9% 5.9% 4.4% 4.2% 6.2
31 32 32 32 32 32 32 31
Services 5.0 2.6 42.8% 37.0% 5.3% 7.3% 6.2% 8.2
12 14 14 14 14 14 14 12
Technology 10.0 4.8 25.1% 97.3% 9.9% 9.1% 20.0% 4.4
11 11 11 11 11 11 11 11
Telecommunications 3.5 2.2 51.3% 29.3% 4.8% 10.2% 1.9% 7.9
19 34 34 34 34 34 34 22
Transportation Services 3.6 2.9 40.6% 23.0% 4.2% 8.7% 2.1% 8.0
14 16 16 16 16 16 16 14
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow-
to- Debt
42 Moody’s Special Comment
Exhibit C- 8: All Speculative- Grade
Aggregate 2.1 1.4 66.8% 12.7% 1.9% 2.1% 3.9% 5.9
n= 595 810 814 814 811 812 814 585
Aerospace &Defense 3.5 1.4 57.4% 14.5% 3.8% 4.0% 7.2% 3.3
13 17 17 17 17 17 17 13
Automotive 1.2 1.5 80.2% 8.6% 0.3% 0.2% 3.2% 9.5
29 38 38 38 38 38 38 30
Chemicals 2.2 1.7 71.4% 10.1% 2.2% 1.7% 2.7% 6.1
21 35 35 35 35 35 35 23
Construction &Engineering 5.0 2.4 50.1% 22.3% 6.4% 6.0% 4.6% 3.0
14 17 17 17 17 17 17 14
Consumer Products 2.2 1.1 63.5% 12.8% 2.2% 2.4% 3.1% 8.2
42 57 57 57 57 57 57 39
Energy &Environment 1.9 1.8 58.0% 12.8% 2.8% 4.3% 3.9% 4.3
44 54 55 55 55 55 55 41
Healthcare 3.0 1.2 56.0% 19.7% 2.7% 3.8% 4.6% 5.5
32 40 41 41 41 41 41 32
Leisure &Entertainment 1.8 1.3 76.2% 9.9% 1.9% 3.0% 4.7% 6.8
48 69 69 69 67 67 69 48
Manufacturing 3.4 1.1 66.0% 12.8% 3.2% 2.9% 4.2% 5.1
38 61 61 61 61 61 61 40
Media 1.2 0.6 76.5% 7.8% 0.0% 0.0% 1.8% 6.5
42 76 76 76 76 76 76 43
Metals &Mining 3.7 3.2 51.6% 24.7% 5.5% 4.3% 9.7% 4.0
20 22 22 22 22 22 22 15
Natural Products 1.3 1.6 67.6% 9.9% 0.1% 0.1% 2.4% 6.4
17 25 25 25 25 25 25 16
Oil &Gas 5.6 3.3 42.8% 35.9% 6.7% 19.1% 1.0% 2.4
34 34 35 35 35 35 35 33
Packaging 1.5 1.2 80.7% 9.1% -0.3% -0.4% 1.4% 9.6
18 23 23 23 23 23 23 17
Pharmaceuticals 11.2 1.6 44.9% 48.5% 6.5% 8.4% 15.8% 5.8
8 9 9 9 8 9 9 8
Retail &Distribution 2.4 1.5 67.8% 13.6% 2.6% 1.4% 3.8% 8.3
74 87 87 87 87 87 87 74
Services 2.2 1.1 68.7% 13.3% 1.6% 2.7% 4.2% 6.1
31 53 53 53 53 53 53 28
Technology 2.2 2.5 42.3% 21.4% 0.0% -0.1% 19.4% 6.2
26 31 32 32 32 32 32 26
Telecommunications 0.8 1.0 84.4% 10.4% -1.2% -1.9% 5.7% 4.7
23 34 34 34 34 34 34 24
Transportation Services 1.4 1.5 70.1% 12.6% 1.0% 1.1% 4.4% 6.9
21 28 28 28 28 28 28 21
Revenue
Stability
Return on
Assets Profit Liquidity
Interest
Coverage
Asset
Coverage Leverage
Cash Flow-
to- Debt
Moody’s Special Comment 43
Appendi x D Def i ni t i on of Fi nanci al Met r i cs
• 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 + Minority
Interest + 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
44 Moody’s Special Comment
Appendi x E Def i ni t i on of I ndust r y Aggr egat es
In this report we study the distribution of financial ratios across 20 industry aggregates. These aggregates are based on
proprietary 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 and
durable 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 medical
service 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 various
wholesale distributors.
• Services
– Business services, consumer services, technology services, and defense services.
• Technology
– Computer hardware, software, component equipment, consumer electronics, semiconductor and
contract manufacturers.
Moody’s Special Comment 45
• 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.
46 Moody’s Special Comment
Ref er ences
Hamilton, D. (2005), “Moody’s Senior Ratings Algorithm & Estimated Senior Ratings,” Moody’s Global Credit
Research, July 2005.
Metz, A., et. al. (2004), “The Distribution of Common Financial Ratios by Rating and Industry for North American
Non-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 American
Non-Financial Corporations,” Moody’s Special Comment, February 2006.
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48 Moody’s Special Comment
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