1 2 Sales from reported to like-for-like (in € millions) YTD sept 05 YTD sept 06 Change Sales (reported) 382.7 457.4 + 19.5 % Currency translation impact ($ and £) - 6.6 Changes in consolidation scope (Algorithmics entrance) - 2.3 SALES (like-for-like) 382.7 448.5 + 17.2 % Sales by company (reported) (in € millions) YTD sept 05 YTD sept 06 Change 382.4 457.1 + 19.5 % Fitch Ratings 331.4 388.8 + 17.3 % Algorithmics 51.0 68.3 + 33.9 % 0.3 0.3 382.7 457.4 FITCH GROUP Other (Parent company) SALES (reported) + 19.5 % Sales by company (like-for-like) (in € millions) YTD sept 05 YTD sept 06 Change 382.4 448.2 + 17.2 % Fitch Ratings 331.4 383.6 + 15.8 % Algorithmics 51.0 64.6 + 26.7 % 0.3 0.3 382.7 448.5 FITCH GROUP Other (Parent company) SALES (like-for-like) + 17.2 % Sales by geographic regions (reported) YTD sept 05 % YTD sept 06 % 1 USA 210.2 54.9 % 237.4 51.9 % 2 UK 51.3 13.4 % 58.4 12.8 % 3 Germany 13.0 3.4 % 18.5 4.0 % 4 France 8.5 2.2 % 10.4 2.3 % 5 Netherlands 6.9 1.8 % 10.1 2.2 % 6 Switzerland 7.8 2.0 % 9.9 2.2 % 7 Italy 9.4 2.5 % 9.8 2.1 % 8 Spain 7.0 1.8 % 8.8 1.9 % 9 Mexico 7.2 1.9 % 8.2 1.8 % 5.8 1.5 % 6.9 1.5 % 10 Japan % TOTAL SALES (reported) 85.5 % 82.7 % From sales to recurring operating income (in € millions) Sales (reported) Operating expenses Recurring operating income YTD sept 05 YTD sept 06 382.7 457.4 - 317.2 - 377.4 65.5 80.0 Change + 19.5% + 22.1% (reported) Currency translation impact ($ and £) - 1.2 2.9 Changes in consolidation scope (Algorithmics entrance) RECURRING OPERATING INCOME (like-for-like) 65.5 81.7 + 24.7% Recurring operating income by company (reported) (in € millions) YTD sept 05 YTD sept 06 Change 75.8 85.6 + 12.9 % Fitch Ratings 96.5 111.7 + 15.8 % Algorithmics - 20.7 - 26.1 - 26.1 % - 10.3 - 5.6 + 45.6 % 65.5 80.0 + 22.1 % FITCH GROUP Other (Parent company) RECURRING OPERATING INCOME (reported) Recurring operating income by company (like-for-like) (in € millions) YTD sept 05 YTD sept 06 Change 75.8 87.3 + 15.2 % Fitch Ratings 96.5 110.0 + 14.0 % Algorithmics - 20.7 - 22.7 - 9.7 % - 10.3 - 5.6 + 45.6 % 65.5 81.7 + 24.7 % FITCH GROUP Other (Parent company) RECURRING OPERATING INCOME (like-for-like) Operating margin (ROI / Sales) 17.1 % 18.2 % From recurring operating income to operating result (reported) (in € millions) YTD sept 05 YTD sept 06 Change 65.5 80.0 + 22.1 % Other operating income and expense - 5.0 - 2.5 OPERATING RESULT (reported) 60.5 77.5 Recurring operating income (reported) + 28.1 % From operating result to net earnings (reported) (in € millions) YTD sept 05 YTD sept 06 60.5 77.5 Interest expense and other financial income (expense) - 13.3 1.4 Taxes - 26.9 - 29.1 0.2 1.0 - 1.7 450.7 Operating result (reported) Equity in net earnings of affiliated companies Net earnings from discontinued operations, and in process of disposal Minority interests - - 9.8 NET EARNINGS (reported) 18.8 491.7 Cash and cash equivalents / (net debt) by company (in € millions) 12/31/2005 09/30/2006 Fitch Group - 226 - 273 Parent company - 186 + 413 Net cash position - Fimalac - 412 + 140 Main cash flows of the parent company from January 1 through September 30, 2006 (in € millions) Net debt as of 12/31/2005 Facom disposal (January 2006) - 186 + 344 Sale of 20 % of Fitch Group (April 2006) + 493 BASA and options exercise + 48 Fimalac shares buyback - 265 Dividends (received/payed), other flows - 21 NET CASH POSITION AS OF 09/30/2006 + 413 Evolution of the treasury stocks level since January 1, 2006 Number of treasury stocks POSITION AS OF 12/31/2005 2006 Buybacks 2 762 131 + 3 942 828 7.3 % (1) 10.4 % (1) 17.7 % Service / BASA and options BASA Options - 1 576 805 - 275 039 - 4.2 % (1) - 0.7 % (1) Cancellations (reductions in capital) 03/15/2006 05/30/2006 09/19/2006 - 400 000 - 1 700 000 - 1 480 000 - 1.1 % (1) - 4.5 % (1) - 3.9 % (1) - 14.4 % POSITION AS OF 09/30/ 2006 (1) (2) % of capital as of 12/31/2005 % of capital as of 09/30/2006 1 273 115 3.7 % (2) Reserved for options : 1.1 % Reserved for BASA : 0.3 % Free : 2.3 % Fimalac share performance vs. CAC 40 and SBF 120 December 1992 to November 15, 2006 1700 FIMALAC 1500 1 435 1300 1100 900 700 SBF 120 337 500 CAC 40 300 301 100 Fimalac share performance vs. CAC 40 and SBF 120 January 2006 to November 15, 2006 150 145 140 135 130 125 120 115 110 105 100 FIMALAC 137 SBF 120 117 CAC 40 116 "Total Shareholder Return" over 10 years SBF120 companies Ranking TSR Over 10 years Annualized in % in % 1 Be ne te au 3 738,8% 44,0% 2 Valloure c 2 836,9% 40,2% 3 Eiffage 2 167,6% 36,6% 4 Maure l Et Prom 2 077,3% 36,1% 5 Vinci 1 400,8% 31,1% 6 Unibail 1 101,2% 28,2% 7 C FF Re cycling 1 035,6% 27,5% 8 Are va 999,5% 27,1% 9 W e nde l Inve stisse me nt 913,3% 26,1% 10 Kle pie rre 852,2% 25,3% 11 Bouygue s 731,8% 23,6% 12 Socie te Ge ne rale 704,7% 23,2% 13 Fimalac 663,6% 22,5% 14 C ime nts Français 634,1% 22,1% 15 BNP Paribas 579,6% 21,1% Source JCF Group Ordinary dividend per share 1,40 1,25 1,05 0,90 0,95 0,95 0,95 0,74 0,55 0,52 0,48 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 9 months 19 History Fitch Group structure Fitch Group Revenue Growth In $ Mil 800 $693 700 600 $565 $511 500 $483 $455 400 $356 $305 300 $222 200 100 $24 $156 $169 1998 1999 $43 0 1996 1997 2000 2001 2002 2003 2004 2005 YTD YTD Sept 05 Sept 06 Fitch Group Operating Income Growth (EBIT) In $ Mil 160 $150 140 $113 120 $110 $106 $96 100 $83 80 $72 60 40 20 $5 $29 $32 1998 1999 $37 $10 0 1996 1997 2000 2001 2002 2003 2004 2005 YTD YTD Sept 05 Sept 06 Fitch Group Sales to Operating Income YTD Sept 05 YTD Sept 06 483.1 565.0 + 17.0% 254.2 299.6 + 17.9 % 83.7 107.4 + 28.3 % 337.9 407.0 + 20.4 % 145.2 158.0 + 8.8 % Profit sharing plan Depreciation Intellectual property 28.6 9.3 11.6 27.1 9.7 15.4 - 5.2 % + 4.3 % + 32.8 % Operating Income 95.7 105.8 + 10.6 % in US$ millions Revenue Personnel costs External expenses Total charges EBITDA % Change Key Figures by Company (in US$ millions) Revenue FITCH GROUP FitchRatings Algorithmics Intercompany revenue EBITDA FITCH GROUP FitchRatings Algorithmics Operating Income FITCH GROUP FitchRatings Algorithmics YTD Sept 05 YTD Sept 06 % Change 483.1 565.0 + 17.0 % 418.6 64.5 - 480.5 87.8 - 3.3 + 14.8 % + 36.1 % 145.2 158.0 156.8 - 11.6 173.4 - 15.4 + 10.6 % 95.7 105.8 + 10.6 % 121.9 - 26.2 138.1 - 32.3 + 13.3 % + 8.8 % 26 Fitch Ratings Overview A leading global provider of credit ratings, opinions, research and data for debt issued in domestic and international markets. Fitch Research A subscription based product that provides access to all of Fitch Ratings’ global credit ratings and research. Fitch Training A service that provides credit risk training to capital market participants Fitch Ratings Revenue growth (in millions of US$) 700 $594 600 $502 500 $481 $448 400 $419 $353 $305 300 200 100 0 2001 2002 2003 2004 2005 YTD Sept 05 YTD Sept 06 Global Debt Issuance ($ Volume) ($US Billions) 6,000 5,000 4,000 3,000 2,000 1,000 0 2002 Source: Thomson Financial 2003 2004 2005 YTD Sept 05 YTD Sept 06 Fitch Ratings Market Share Fitch Market Share (By Dollar Volume) 100% 90% 89% 89% 80% 70% 60% 50% 40% 65% 53% 66% 51% 30% 20% 10% 0% Structured Finance Financial Institutions FY 2005 YTD Sept 06 Non-Financial Corporates Fitch Ratings Revenue by Segment (in US$ millions) YTD Sept 05 YTD Sept 06 % Change Structured Finance 224.7 246.7 + 9.8% Corporate Finance 147.2 178.8 + 21.5% 46.7 55.0 + 17.8% 418.6 480.5 + 14.8% Subscriptions /Training TOTAL FITCH RATINGS Fitch Ratings Revenue by Region (in US$ millions) YTD Sept 05 YTD Sept 06 % Change North America 248.5 271.3 + 9.2% Europe, Middle East & Africa 139.6 173.0 + 23.9% Latin America 17.5 20.0 + 14.3% Asia Pacific 13.0 16.2 + 24.6% 418.6 480.5 + 14.8% TOTAL FITCH RATINGS Fitch Ratings EBITDA and Operating Income (in US$ millions) YTD Sept 05 YTD % Change Sept 06 Revenue 418.6 480.5 + 14.8% EBITDA 156.8 173.4 + 10.6% EBITDA Margin 37.5 % 36.1 % 28.4 27.2 6.5 8.1 + 24.6% Operating Income 121.9 138.1 + 13.3% Operating Income Margin 29.1 % 28.7 % Profit sharing plan Depreciation & Amortization - 4.2% 2006 Accomplishments Structured Finance Enhanced analytical model for RMBS market. Launched a new performance analytics product SMARTView, for US CMBS, to provide timely monthly surveillance for all rated deals. Won The International Securitisation Report’s, Best International Structured Finance Rating Agency of the Year award. 2006 Accomplishments Structured Finance (cont’d) Credit Derivative Initiative Updated VECTOR model for the Structured Credit Market. Released a new Rating Analytics Platform for Credit Derivatives (RAP CD) that provides mark to model pricing for synthetics CDOs. Acquired Reoch Credit, Ltd, and its pricing model platform. Launched Stability Scores, a service that provides transparency to compare and contrast tranches of transactions and their relative stability. Created Commercial Real Estate CDO team. 2006 Accomplishments Corporate Finance Added 250 corporate, financial institution and insurance mandate ratings during the first nine months of 2006. Roll-out of Recovery Ratings. Launched Prism, the first global stochastic Insurance Capital Model. Financial Guaranty Capital Model in development. Expansion into the leveraged loan market. 2006 Accomplishments Business Development Continued institutionalization of Fitch into investment guidelines, risk management systems and trading platforms. 80 of the top 100 U.S. investors 42 of the top 50 public pension fund investors 19 of the top 50 corporate pension fund investors Growth in subscription research and data products Fitch Ratings Investment in Human Capital Headcount 2,064 2,100 1,827 1,800 1,500 1,767 1,617 1,350 1,447 1,200 900 600 300 0 12/31/02 12/31/03 12/31/04 12/31/05 09/30/05 09/30/06 2007 Initiatives Structured Finance Initiatives Derivative Fitch launch and continued focus on meeting demands of the credit derivatives market Release and implementation of new models: ResiLogic, new US RMBS model New US CMBS model Continued focus on EMEA expansion and emerging markets securitization growth Participation in the global growth of Asset Backed Commercial Paper. 2007 Initiatives (cont’d) Corporate Finance Continued expansion into rapidly growing new markets Continued expansion in existing markets Corporate loan ratings Emerging markets Covered bonds The high yield and loan markets Introduction of new analytical tools and procedures including new quantitative models and analytics Focused effort at servicing the burgeoning infrastructure financing market Fitch Ratings Launch of Derivative Fitch FitchGroup 30,000 25,000 20,000 15,000 10,000 5,000 Cash Bonds * 06 20 05 20 04 20 03 20 02 20 01 20 00 20 99 19 98 19 97 0 19 Notional Outstanding (USD Trillion) Fitch Ratings Credit Derivative Growth Outpacing Cash Market Credit Derivatives Source: British Bankers Association, Bank for International Settlements, ISDA *as of 30 June 2006 Fitch Ratings Global CDO Market Issuance (in millions of US$) 350 $322 300 $249 250 200 $157 150 100 50 0 2004 Source: The Bond Market Association 2005 YTD Sept 06 Fitch Ratings Derivative Fitch Today Key Features Credit Ratings & Surveillance Established & Leading Credit Models Leading Edge Research Market Risk Analytics Fitch Ratings Expanding Tools and Methodologies Used to Analyze Credit Stability and Market Risk Traditional Ratings - Further granularity of credit risk Mean default probability Recovery Analysis Surveillance Market Implied Ratings Scenario & Stress Analysis Default Risk Modeling Pre-sale reports Derivative Ratings - Ratings and services that incorporate credit and market risk Migration Analysis Mark to Model Pricing Correlation CDS Pricing Greek Sensitivity Analysis Stability Analysis Portfolio Evaluation Fitch Ratings Goals Create and maintain reputation for highest quality ratings and research Maintain and grow market share across all key segments and regions Enhance pricing flexibility Continue consistent long-term investment plan Fitch Ratings secular revenue growth: 10–12% US: 8–10% International: 15–20% 47 Algorithmics Introduction Algorithmics is an internationally recognized leader in the development and delivery of enterprise solutions for the measurement and reporting of risk, and business applications that enable clients to make riskaware business decisions Algorithmics Revenue by Region (in millions of US$) YTD Sept 05 YTD Sept 06 % Change North America 19.9 28.8 44.7% Europe, Middle East & Africa 37.0 46.4 25.4% Latin America 3.2 3.9 21.9% Asia Pacific 4.4 8.7 97.7% 64.5 87.8* 36.1% TOTAL ALGORITHMICS * Includes inter-company revenue of $3.3 million Algorithmics EBITDA and Operating Income (in millions of US$) YTD Sept 05 YTD Sept 06 % change 64.5 - 11.6 87.8* - 15.4 + 36.1% Profit sharing plan 0.2 - 0.1 Depreciation 2.8 2.5 11.6 14.5 - 26.2 - 32.3 Revenue EBITDA Intellectual property Recurring Operating Income * Includes inter-company revenue of $3.3 million Algorithmics Highlights 330 software solution clients (30 new) 120 data and content clients 70 of the world’s top 100 banks 1 752 (87 new) professionals in 19 (+1) global offices Notes: 1 Top 100 banks according to “The Banker” Algorithmics 2006 Achievements Growth 53 new licenses 26.7 % revenue growth vs. 2005 (comparable numbers) Investment in Human Capital Grew expertise and capacity in services, advisory, sales and marketing Recent Media and Analyst Recognition Risk Technology rankings: #1 in 6 categories Placed in Gartner’s Leaders Quadrant for Basel II for 2006 Algorithmics Solution Achievements Credit and Capital Solutions 108 clients (80 in 2005) Market Risk Solutions 128 clients (100 in 2005) Operational Risk Solutions 89 clients (80 in 2005) Collateral Management Solutions 68 clients (60 in 2005) Algorithmics Recognized Leadership “The broadest and deepest offering available for Basel II ...advanced features and technology... an integrated approach to market, credit, and operational risk, but also delivers data and sophisticated analytics/models.“ Source: Celent, February 2006 Algorithmics Investment Focus Pursuing our Growth Strategy in 2007 Expanding sales and services to support revenue growth Establishing presence in new geographical markets Investing in direct managed service solutions for asset managers and hedge funds Developing broader risk solution for the insurance industry Continued focus on core solutions – completing product development plans Algorithmics 2007 Outlook Market Drivers Adoption of ‘risk aware’ business applications in financial services Increasingly complex financial markets and products which require more sophisticated tools Regulation for banks (more countries adopting Basel II), asset managers and insurance companies (e.g. Solvency II) Financial institutions’ increasing use of external vendors for risk solutions Appendix 57 Fitch Ratings Glossary of Terms Asset Backed Security (ABS) - A financial security backed by a loan, lease or receivables against assets other than real estate and mortgage-backed securities Collateralized Debt Obligation (CDO) - An investment-grade security backed by a pool of bonds, loans and other assets. A CDO is unique in that it is comprised of different tranches, each with a different maturity and risk associated with it. Collateralized Loan Obligation (CLO) - A CDO backed by a pool of loans. Financial institutions back this security with receivables from loans. Commercial Mortgage Backed Security (CMBS) - A type of mortgage-backed security that is secured by the loan on a commercial property. Residential Mortgage Backed Security (RMBS) - A type of security whose cash flows come from residential debt such as mortgages, home-equity loans and sub-prime mortgages Fitch Ratings Glossary of Terms (cont’d) Fitch Prism Capital Model (Prism) - a fully stochastic economic global capital model that will be used to apply ratings consistency from insurer to insurer. Fitch RAP CD - Fitch’s Risk Analytics Platform for Credit Derivatives is a breakthrough global market-risk assessment service that helps investors understand how their CDO investments trade by tracing price movements back to the changes in the CDOs underlying portfolio from which they stem. Fitch Recovery Ratings –A sophisticated approach to measure the primary components of credit risk: default and loss given default Recovery Ratings - the prospects of recovery in the event of a default Issuer Default Ratings - The probability that an entity will default on its commitment. Fitch Stability Scores - CDOs are divided into tranches, each having a different maturity and risk associated with it and therefore each carrying its own rating. A stability score is an estimate of the probability of a rating remaining in the same category after the passage of one year, thus helping investors compare and contrast transactions that may have the same ratings but possess different characteristics. Fitch VECTOR Default Model (VECTOR) - Fitch Ratings’ main quantitative tool for evaluating default risk in credit portfolios backing CDOs. The main outputs of VECTOR are the rating default rate, rating loss rate and the rating recovery rate corresponding to each rating tier within a security.