Presentation
May 28, 2008
Key figures of the first half 2007-2008
ending at March 31, 2008
(October 1, 2007 – March 31, 2008)
Sales from Reported to Like-for-Like
(in € millions)
1H 2006/2007 1H 2007/2008
(Oct. 06 – Mar. 07) (Oct. 07 – Mar. 08)
SALES (reported)
365.7
-18.5%
26.2
Currency Translation Impact
-18.4
Changes in Consolidation Scope (Korea Ratings)
SALES
(like-for-like)
297.9
% Change
365.7
305.7
-16.3%
Sales by Company
(reported)
(in € millions)
1H 2006/2007 1H 2007/2008
(Oct. 06 – Mar. 07) (Oct. 07 – Mar. 08)
% Change
FITCH GROUP
Fitch Ratings (excl. Korea Ratings)
Korea Ratings
Fitch Ratings
Algorithmics
Intercompany Eliminations
SALES
(reported)
(*) Split of Korea Ratings Sales
Ratings: 8.0 M€
Other: 10.4 M€
313.3
313.3
54.1
-
1.7
365.7
227.7 18.4(*)
246.1 53.5 - 1.7
297.9
27.3%
21.4%
1.1%
-18.5%
Sales by Company
(like-for-like)
(in € millions)
1H 2006/2007 1H 2007/2008
(Oct. 06 – Mar. 07) (Oct. 07 – Mar. 08)
% Change
FITCH GROUP
Fitch Ratings
313.3
249.2
- 20.5%
Algorithmics
54.1
58.4
+ 7.9%
- 1.7
- 1.9
Intercompany Eliminations
SALES
(like-for-like)
365.7
305.7
- 16.3%
Sales by Geographic Regions
(reported)
1H 2006/2007
(Oct. 06 – Mar. 07)
1
2
3
4
5
6
7
8
9
10
USA
UK
South Korea
Germany
Netherlands
Spain
Italy
France
Switzerland
Ireland
Total Sales % (reported)
%
1H 2006/2007
(Oct. 07 – Mar. 08)
%
178.5
48.8 %
113.0
37.9 %
53.2
14.5 %
36.8
12.4 %
1.1
0.3 %
18.9
6.3 %
13.8
3.8 %
14.2
4.8 %
10.4
2.8 %
10.1
3.4 %
8.3
2.3 %
8.0
2.7 %
8.6
2.4 %
8.0
2.7 %
8.1
2.2 %
7.8
2.6 %
6.7
1.8 %
6.6
2.2 %
6.7
1.8 %
5.9
2.0 %
80.7 %
77.0 %
From Sales
to Recurring Operating Income
(in € millions)
Sales (reported)
Operating Expenses
Recurring Operating Income
1H 2006/2007 1H 2007/2008
(Oct. 06 – Mar. 07) (Oct. 07 – Mar. 08)
365.7
297.9
- 287.5
- 232.2
78.2
65.7
% Change
- 18.5%
- 16.0%
(reported)
Currency Translation Impact
Changes in Consolidation Scope (Korea Ratings)
RECURRING OPERATING
INCOME (like-for-like)
78.2
7.5
-
3.3
69.9
- 10.6%
Recurring Operating Income by Company
(reported)
(in € millions)
1H 2006/2007 1H 2007/2008
(Oct. 06 – Mar. 07) (Oct. 07 – Mar. 08)
FITCH GROUP
% Change
84.3
70.9
- 15.9%
Fitch Ratings (excl. Korea Ratings)
Korea Ratings
Fitch Ratings
101.0
- 24.9%
101.0
75.9
3.3
79.2
Algorithmics
- 16.7
- 8.3
+ 50.3%
- 6.1
- 5.2
78.2
65.7
Other (Parent Company & Holdings)
RECURRING OPERATING
INCOME (reported)
- 21.6%
- 16.0%
Recurring Operating Income by Company
(like-for-like)
(in € millions)
1H 2006/2007 1H 2007/2008
(Oct. 06 – Mar. 07) (Oct. 07 – Mar. 08)
% Change
FITCH GROUP
84.3
75.1
- 10.9%
Fitch Ratings
Algorithmics
101.0
- 16.7
82.5
- 7.4
- 18.3%
+ 55.7%
- 6.1
- 5.2
78.2
69.9
32.2%
23.1%
21.4%
33.1%
24.6%
22.9%
Other (Parent Company & Holdings)
RECURRING OPERATING
INCOME (like-for-like)
Operating Margin Rate (ROI / Sales)
Fitch Ratings Level
Fitch Group Level
Fimalac Consolidation Level
- 10.6%
From Recurring Operating Income
to Operating Result (reported)
(in € millions)
Recurring Operating Income
1H 2006/2007 1H 2007/2008
(Oct. 06 – Mar. 07) (Oct. 07 – Mar. 08)
(reported)
78.2
65.7
Other Operating Income & Expense
26.4
13.2
104.6
78.9
OPERATING RESULT
(reported)
% Change
- 16.0%
- 24.6%
From Operating Result
to Net Earnings (reported)
(in € millions)
1H 2006/2007
1H 2007/2008
(Oct. 06 – Mar. 07)
(Oct. 07 – Mar. 08)
104.6
78.9
4.5
- 12.5
- 47.0
- 26.5
0.3
0.3
Minority Interests
- 8.5
- 9.3
NET EARNINGS
Group Share (reported)
53.9
30.9
Operating Result (reported)
Net Interest Expense, Other Financial
Income / (Expense)
Taxes
Equity in Net Earnings of Affiliated Companies
Evolution of Fimalac’s Shareholding
Majority Shareholder
Treasury Stocks
including Reserved Treasury Stocks
09/30/2007
03/31/2008
66.3%
67.7%
6.9%
9.9%
1.1%
1.1%
26.8%
22.4%
100.0%
100.0%
(stock options)
Others
Cash and Cash Equivalents / (Net Debt)
by Company
(in € millions)
09/30/2007
03/31/2008
Fitch Group
- 160
- 196
Parent Company & Holdings
+ 243
+ 187
Net Cash Position (excl. Building)
+ 83
-
9
- 225
-
182
North Colonnade (London Building)
Fimalac Share Performance vs. CAC40 and SBF120
December 1992 to May 15, 2008
1900
1700
1500
1300
1100
900
700
500
300
100
FIMALAC
872
SBF 120
375
CAC 40
272
Group History
Group Structure
80%
Note: Derivative Fitch subsidiary folded back into Fitch Ratings in January 2008
20%
Fitch Group
Revenue Trend
In $ Mil
1200
$989
1000
$774
800
$693
600
$511
$474
$455
400
$305
$439
$356
$222
$156
200
$24
$169
$43
1H
20
06
/2
00
1H
7
20
07
/2
00
8
20
05
/2
00
6
20
06
/2
00
7
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
19
97
19
96
0
Note: Korea Ratings included beginning in 1H 2007 / 2008
Fitch Group
Operating Income Trend
In $ Mil
250
$211
200
$150
$160
150
$113
100
$72
50
$29
$5
$32
$110
$109
$105
$83
$37
$10
20
08
20
07
/
20
07
1H
20
06
/
1H
20
05
/2
00
6
20
06
/2
00
7
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
19
97
19
96
0
Fitch Group
Sales to Operating Income
in US$ millions
Revenue
Personnel costs
External expenses
Total charges
EBITDA
Profit sharing plan
Depreciation
Intangible assets amortization
Operating Income
1H 06/07
1H 07/08
% Change
473.6
438.9
-7.3%
231.6
226.2
- 2.3%
75.1
75.5
+ 0.1%
306.7
301.7
- 1.6%
166.9
137.2
-17.8%
37.9
8.5
11.4
9.1
9.9
13.7
109.1
104.5
- 4.2%
1H 07/08 Financial Highlights
(US$ millions)
Revenue
EBITDA
1H
1H
06/07 07/08
FITCH GROUP 473.6 438.9
Fitch Ratings
405.7 335.5
Korea Ratings
1H
1H
06/07 07/08
70.1
Eliminations
- 2.2 - 2.5
1H
06/07
1H
07/08
- 7.3% 166.9 137.2 -17.8% 109.1 104.5 - 4.2%
-17.3% 175.1 128.4 -26.7% 130.8 111.9 -14.4%
27.1
Algorithmics
Op Income
78.8 +12.4%
-8.2
6.7
4.9
2.1
-21.7 -12.3
Market Overview
The credit markets began to turn in mid-2007 as the impact of broader
market factors became clearer
Significantly increased leverage
Reduced risk premia
Mismatch of long- and short-dated funding
Aggressive underwriting / fraud
Evidence of underlying asset performance far worse than expected led to
downgrades- primarily affecting US sub-prime RMBS and CDOs of ABS
The overall impact has been far-reaching
Bank asset write-downs / reported losses
Increased volatility and widening spreads across asset classes
Decreased investor demand for riskier, more complex assets
Reduced bond issuance
Contagion effects – e.g., auction rate securities, financial guarantors, SIVs, etc.
Tightened lending standards
Structured Finance Ratings Activity
The pace and magnitude of deterioration in the US sub-prime market greatly
exceeded expectations and led to
Criteria reviews
Portfolio reviews
Rating actions (e.g. US RMBS, CDOs of ABS)
However, many asset classes
continue to perform within
stress parameters (e.g. ABS and
CMBS)
Consequently, Fitch’s ratings
actions reflect a significantly
higher number of downgrades
than upgrades in 2007
2007
Corporate Finance Ratings Activity
Corporate credit quality remained resilient- relative to structured finance- as
upgrades marginally exceeded downgrades in 2007
In calendar 2H07, corporate credit quality began to show strain linked to the declining
housing market, leading to an increased number of downgrades
Financial institutions, particularly in North American and Europe, experienced meaningful
credit deterioration toward the end of 2007 and into 2008
2007
Global Debt Issuance
In fiscal 1H 07/08, global bond issuance volume tumbled
Global deal volume of $1.2 trillion in calendar 1Q08 was 45% less than 1Q07
Asset classes most relevant to Fitch have experienced significant decreases in
issuance
Global Debt Capital Markets by Asset Class
1H 06/07
1H 07/08
Source: Thomson Reuters
Structured Finance
Global structured finance issuance volume totaled $99B in calendar 1Q08, the
lowest quarterly volume since 3Q96
Issuance volume in calendar 1Q08 represents an 87% drop from issuance in 1Q07
Calendar 1Q08 is the third consecutive quarter-over-quarter decline in issuance volume
Global Structured Finance (a)
(a) Quarterly issuance. ‘Other’ includes auto, credit card and student loan ABS.
(b) Commercial mortgage-backed securities
(c) Residential mortgage-backed securities
Source: Dealogic; Bank of England
Structured Finance
The US structured finance market saw its lowest quarterly volume in more
than a decade
Total US residential real estate securitizations declined 97% in calendar 1Q08
compared to the same period in 2007
US CDO issuance declined 91% in calendar 1Q08 versus the same period last year
US CMBS issuance in calendar 1Q08 was down 89% versus 1Q07
Issuance volumes in the European structured finance market were also
impacted, as evidenced by calendar 1Q08 issuance versus 1Q07
ABS down 18%
RMBS down 51%
CDO down 58%
CMBS down 93%
Sources: Thomson Reuters, JPMorgan, ABAlert
Corporate Finance
Investment Grade
The investment grade market has been less affected and remains attractive
for borrowers as investors pursue a “flight to quality”
Global Investment Grade Bond Issuance
1 000
$ Billions
800
600
400
200
0
1Q 06
2Q 06
3Q 06
4Q 06
1Q 07
2Q 07
3Q 07
4Q 07
1Q 08
US investment grade bond issuance rose 11% in calendar 1Q08 versus the
prior quarter but declined 13% from the prior year
Issuance in April hit a record as companies took advantage of the improving market
sentiment and strong investor demand
Investment grade bond issuance in EMEA decreased in 9% in calendar
1Q08 as compared with 4Q07
Source: Dealogic, Goldman Sachs, Fitch Ratings
Corporate Finance
High Yield and Leverage Loans
However, US and European high yield bond and leveraged loan markets
have been impacted more significantly
In calendar 1Q08, Europe saw no high yield bond issuance while US high yield bond
issuance was down 72% versus 1Q07
US and European leveraged loan issuance volume declined 74% and 88%,
respectively, in calendar 1Q08 as compared with the same period last year
US High Yield and Loan Volumes ($B)
European High Yield and Loan Volumes (€B)
1 000
350
Total Le ve rage d Loans
HY Bonds
300
800
Total Le ve rage d Loans
HY Bonds
600
€ Billions
$ Billions
250
400
200
150
100
200
50
0
0
2004 2005
Source: Fitch Ratings
2006
2007
Sources: Fitch Ratings, European High Yield Association
1Q 07 1Q 08
2004 2005 2006 2007
Source: European High Yield Association
1Q 07
1Q 08
Regulatory Environment
As current market conditions evolve, regulatory bodies have been assessing
the roles and policies of the rating agencies and proposing recommendations
for change
IOSCO
SEC
Committee on European Securities Regulators
Financial Stability Forum (central bankers, regulators and finance ministers)
US President’s Working Group on Financial Markets
US Congress
Final reports from key regulators are anticipated soon
Fitch has committed to a series of specific measures to enhance the
independence, transparency and quality of the credit rating process and the
credit rating industry
Developed and committed to jointly with the other credit rating agencies
These efforts are in addition to Fitch’s own analytical and organizational initiatives
Credit Initiatives
Fitch’s primary focus is on credit analytics and delivering the most appropriate
ratings to the market in the timeliest manner
Rating reviews, updating methodologies / models, publishing research, etc
Key analytical developments include:
Real time engagement with the market
 Evaluating potential complementary rating scales for structured finance
 Assessing the merits of “harmonizing” corporate and public finance rating scales
Analytical initiatives
 Revised criteria and model for CDOs exposed to corporate debt
 Completed full review of US RMBS ratings criteria; revised ResiLogic model
 Initiated deterministic stress analysis of the global structured finance portfolio
 Updated criteria for rating Market Value Structures
 Focus on IFS ratings for financial guarantors
 Established a “Complex Bank Group”
Organizational Initiatives
Recent organizational changes include:
Launched Fitch Solutions in January 2008 to reinforce the independence of the rating
agency and create a more focused grouping of credit products and services
Several senior management changes
Implementation of Chief Credit Officer and Risk Officer roles in both Corporates /
Financial Institutions and Structured Finance

To bring enhanced analytical oversight, experience and training to the analytical
groups
Fitch Solutions Overview
A new division that consolidates all non-rating products and services, product
development, credit training, and the firm's product sales force
Reinforces and further separates Fitch’s analytical activities from commercial activities
Current Fitch Ratings content forms the core of initial offerings – e.g., research,
ratings data
Over 1,100 subscribing firms and 8,500 users
Subscription-based revenue streams
 Predictable, recurring revenue base with historically strong renewal rates
 Not directly tied to issuance
Scalable, growth oriented business model
Incorporates recently launched / acquired products such as Fitch CDS Pricing,
Market Implied Ratings and RAP CD
Specialized products to meet increased market demand for data and tools used in the
assessment of credit and market risk
Fitch Solutions Recent
Developments
Acquisition of equity stake in Portsmouth Financial Systems in May 2008
Next generation provider of structured finance analytics (e.g. cash flow models,
underlying assets, etc.)
Reaffirms Fitch’s commitment to provide solutions that meet evolving investor needs
and to increase transparency in structured finance markets
Launch of Fitch ABCDS Pricing in March 2008
Consensus pricing for asset-backed credit default swaps (ABCDS) with a benchmark
service to provide a derived price for illiquid assets
Complements existing single name CDS and Loan CDS services and reflects expansion
of Fitch’s efforts in the pricing and valuation services business
Introduction of Covered Bonds SMART in March 2008
New surveillance and research service for the covered bonds market
First rating agency to have developed this type of service for this sector
Asia Pacific Growth Platforms
Fitch maintains 15 offices in 11 countries
throughout the Asia Pacific region
Korea Ratings Revenue
Asian capital markets are growing and
dynamic; Fitch is continually evaluating
investment and acquisition opportunities
$30
$27
$24
$25
Strategic investments over the past year
include:
Acquisition of 54% stake in Korea Ratings, the
leading Korean credit rating agency
Acquisition of 49% stake in China Lianhe
Credit Rating, one of China’s largest domestic
market rating agencies
Investments in Fitch’s Indian operations to
capitalize on growing domestic market
$ millions
$20
$15
$10
$5
$0
1H 06/07
1H 07/08
Note: Equity stake in Korea Ratings effective April
2007. 1H06/07 Korea Ratings revenue is
represented on a pro-forma basis as if Fitch Ratings
held a majority stake during this period.
Revenue by Segment
Revenue
(US$ millions)
1H 06/07
FITCH RATINGS
1H 07/08
% change
405.7
335.5
- 17.3%
Structured Finance
213.1
128.5
- 39.7%
Corporate Finance
149.4
155.0
+ 3.7%
43.2
52.0
+ 20.4%
N/A
27.1
Subscriptions / Training
KOREA RATINGS
Note: The 1H06/07 segment split reflects minor changes from previously released figures for the reclassification of
Global Infrastructure ratings revenue.
“Subscriptions / Training” reflects business managed as “Fitch Solutions”
Revenue by Region
Revenue
(US$ millions)
1H 06/07
1H 07/08
% change
FITCH RATINGS
405.7
335.5
- 17.3%
North America
218.5
152.6
- 30.2%
EMEA
150.4
145.6
+ 3.2%
Latin America
18.1
20.3
+ 12.2%
Asia Pacific
18.7
17.0
- 9.1%
KOREA RATINGS
N/A
27.1
Note: The 1H06/07 regional split reflects minor changes in regional reporting from previously reported figures.
Fitch Ratings
EBITDA and Operating Income
(in US$ millions)
1H 06 / 07
1H 07 / 08
% Change
Revenue
405.7
335.5
-17.3%
EBITDA
175.1
128.4
-26.7%
EBITDA Margin
43.2%
38.3%
37.7
9.0
6.6
7.5
Operating Income
130.8
111.9
Operating Income Margin
32.2%
33.4%
Profit sharing plan
Depreciation & Amortization
Note: Financials exclude Korea Ratings
-14.4%
Expense Management
Fitch has been cautiously managing all costs, specifically compensation
expenses, by reducing
Variable compensation expenses, bonus accruals, and incentive compensation charges
Headcount
 In January 2008, Fitch announced a reduction in headcount of 150, or roughly 7%, by
September 2008
 In April 2008, Fitch revised staff reduction estimates to 180 – 200, or 8% – 10% of
total employees by fiscal year end
Careful expense management, balanced with focused investments in areas of
continued growth, will provide Fitch with a stable platform to move forward
Current Market Dynamics
Some positive developments…
BlackRock’s purchase of a $15 billion
portfolio of sub-prime mortgage debt and
other similar deals
… but continued challenges remain
Fundamentals in housing markets
remain weak
Further ratings downgrades possible
Banks reducing unsold bond and
leveraged loan commitments (from
$300B last summer to about $100B
recently)
Bond issuance by banks of $303 billion
globally in April, the third-highest month
of all time
US high yield debt issuance of over $4
billion in April, the highest monthly
volume since November 2007
Spreads tightening in April and May, but
still much wider than same period last
year
Sources: Dealogic, Thomson Reuters, The Wall Street Journal
Concerns over broader economic
slowdown
Many structured finance markets
remain inactive
Financial institutions continue to
write down assets
Key Challenges for 2008
Balancing the short term business impact against longer term challenges
and opportunities
Dichotomy between Structured and Corporates, US and the rest of the world
Ever increasing demand for quality due to the complexity of the capital markets
and market volatility
Longer term opportunity to distinguish ourselves
Reputational and regulatory challenges to the industry
Market confidence in rating agencies has been shaken
Numerous regulatory bodies are interested in “fixing” the credit problems
Reacting without overreacting
Organizational changes
Introducing new products to fill market voids
Acquisitions to complement the business
Conclusion
The entire organization has rallied around the urgency of the credit
challenges, aiming to be timely and transparent with our research and
ratings
We expect that corporate ratings will continue on a growth trend
We are less sure about the timing and extent of structured markets
recovery
Fitch Ratings revenues for the fiscal year ending September 2008 could
decrease by roughly 20% on a like-for-like basis as compared to fiscal
2007
Algorithmics
Highlights
54 New License Orders
♦
Strong add-on sales and new business
383 Software Solution clients
♦
Continuing expansion into existing accounts
162 Content and Data clients
♦
Growth in subscription revenue
Over 701 of the world’s 100 largest financial institutions
♦
Provides annuity stream
756 professionals in 19 global offices
♦
Strengthening sales and delivery capabilities
Notes:
1 Top 100 banks according to “The Banker”
Algorithmics
Solution Achievements
Credit and Capital Solutions
126 clients
Market Risk Solutions
154 clients
Operational Risk Solutions
102 clients
Collateral Management Solutions
70 clients
Algorithmics
Revenue by Region
(in millions of US$)
2006/2007
2007/2008
(Oct 06 – Mar 07)
(Oct 07 - Mar 08)
North America
18.7
20.1
+ 7.5%
Europe, Middle East & Africa
36.2
47.2
+ 30.4%
3.0
3.4
+13.3%
12.2
8.1
- 33.6%
70.1*
78.8*
+ 12.4%
Latin America
Asia Pacific
TOTAL ALGORITHMICS
% Change
* Includes inter-company revenue of $2.2 and $2.5M million for the period March 07 and March 08 respectively.
Algorithmics
EBITDA and Operating Income
(in millions of US$)
2006/2007
2007/2008
(Oct 06 – Mar 07)
(Oct 07 - Mar 08)
Revenue
70.1
EBITDA
- 8.2
+ 2.1
Profit sharing plan
0.2
0.1
Depreciation
1.9
2.9
11.4
11.4
- 21.7
- 12.3
Intangible assets amortization
Recurring Operating Income
(*)
78.8
(*)
% Change
+ 12.4%
*Includes inter-company revenue of $2.2M and $2.5M for the period March 07 and March 08 respectively.
Algorithmics
Market Drivers
Current market turmoil reinforces the importance of ubiquitous
and effective risk management
Increasingly, financial institutions adopt ‘risk-aware’ business
applications to enable informed growth
Sound risk management is becoming a critical requirement in
‘related’ market verticals and emerging markets
Growing complexity and cost pressures reinforce ‘buy’ over ‘build’
decisions
Algorithmics
Investment Focus

Establishing presence in new geographical markets
January 15, 2008 – “IBM and Algorithmics to build first advanced risk management system for
a Securities House in China – Guotai Juan Securities “
March 5, 2008– “Alliance Bank Malaysia Berhad, Malaysia’s premier integrated financial
services group has selected and implemented the Algo OpVar Standard Edition solution for
operational risk. “

Investing in managed service solutions for asset managers and hedge funds
December 11, 2007 – “RenaissanceRe Holdings, one of the world’s largest reinsurers of
natural and man-made catastrophes selected Algo Risk Service to advance its risk culture.”

Developing broader risk solution for the insurance industry
Life and Pensions 2008– “ING developed a replication approach using technology provided
by Algorithmics for back-end analysis, and a very unique replication portfolio technology,
which was implemented globally for 96% of ING’s business in 2007

Continued focus on core solutions
April 9, 2008 – “Nedbank, working in partnership with Algorithmics has implemented a
comprehensive, integrated market and credit risk management infrastructure to support
informed risk decision making. Nedbank uses a suite of products, including Algo Credit
Regulatory Capital, Algo Credit Administrator and Algo Credit Limits.”
Algorithmics
Recognized Leadership
2007 -- Risk Rankings: 5 First Place Finishes
“Algorithmics held its dominant position in market, credit, operational risk, collateral
management and Basel II”.
2008 -- Operational Risk and Compliance: Close Second
Ranked a very close second overall with top rankings in Scenario analysis and Regulatory
and Economic Capital
2008 -- Celent Evaluation: Ranked as Leader
Ranked as a leader in Celent’s Evaluation of Financial and Credit Risk Solution Vendors
in advanced features and technology amongst 10 competitors
2008 -- Life and Pensions: Adapted technology for new use
“By enhancing its optimisation technology, and combining this with its scenario-based
market risk capabilities, Algorithmics has caught the traditional vendors of actuarial
software on the hop.”