Exhibit 99.1
MSCI Inc.
Reports Second Quarter 2013 Financial Results and Announces Additional
$100 Million Accelerated Share Repurchase
NEW YORK--(BUSINESS WIRE)--August 1, 2013--MSCI Inc. (NYSE: MSCI), a
leading global provider of investment decision support tools, including
indices, portfolio risk and performance analytics and corporate
governance services, today announced results for the second quarter and
six months ended June 30, 2013.
(Note: Percentage changes are referenced to the comparable period in
2012, unless otherwise noted.)
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Operating revenues increased 8.1% to $257.9 million in second
quarter 2013 and 9.0% to $509.8 million for six months 2013.
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Net income increased 62.6% to $61.1 million in second quarter 2013
and net income grew 47.2% to $120.0 million for six months 2013.
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Diluted EPS for second quarter 2013 rose 66.7% to $0.50 and six
months 2013 Diluted EPS increased 48.5% to $0.98.
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Adjusted EBITDA1 grew by 8.0% to $116.6 million in
second quarter 2013. For six months 2013, Adjusted EBITDA1
grew by 8.0% to $226.7 million. Second quarter 2013 Adjusted EBITDA
margin was flat at 45.2% and six months 2013 Adjusted EBITDA margin
fell slightly to 44.5% from 44.9%.
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Second quarter 2013 Adjusted EPS2 rose 16.0% to $0.58.
Six months 2013 Adjusted EPS2 rose 21.3% to $1.14.
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MSCI’s Run Rate grew by 7.9% to $992.6 million in second quarter
2013, driven by organic3 subscription growth of 3.7%,
organic asset-based fee growth of 2.1% and the acquisitions of IPD and
InvestorForce.
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MSCI announced that it will enter into a $100.0 million accelerated
share repurchase (“ASR”) agreement as of the market-close today. The
prior agreement, which was announced in December 2012 and concluded in
July 2013, resulted in the repurchase of 3.0 million shares.
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Table 1: MSCI Inc. Selected Financial Information (unaudited)
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Three Months Ended
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Change from
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Six Months Ended
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Change From
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June 30,
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June 30,
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June 30,
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June 30,
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June 30,
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June 30,
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In thousands, except per share data
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2013
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2012
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2012
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2013
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2012
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2012
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Operating revenues
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$
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257,898
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$
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238,565
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8.1
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%
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$
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509,807
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$
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467,617
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9.0
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%
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Operating expenses
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$
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160,726
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$
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151,444
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6.1
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%
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$
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322,108
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$
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299,517
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7.5
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%
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Net income
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$
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61,053
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$
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37,546
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62.6
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%
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$
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119,990
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$
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81,512
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47.2
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%
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% Margin
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23.7
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%
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15.7
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%
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23.5
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%
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17.4
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%
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Diluted EPS
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$
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0.50
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$
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0.30
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66.7
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%
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$
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0.98
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$
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0.66
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48.5
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%
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Adjusted EPS2
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$
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0.58
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$
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0.50
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16.0
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%
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$
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1.14
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$
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0.94
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21.3
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%
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Adjusted EBITDA1
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$
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116,562
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$
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107,912
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8.0
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%
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$
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226,655
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$
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209,819
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8.0
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%
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% Margin
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45.2
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%
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45.2
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%
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44.5
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%
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44.9
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%
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1 Net Income before income taxes, other net expense and
income, depreciation, amortization, non-recurring stock-based
compensation, the lease exit charge and restructuring costs. See
Table 13 titled "Reconciliation of Adjusted EBITDA to Net Income
(unaudited)" and information about the use of non-GAAP financial
information provided under "Notes Regarding the Use of Non-GAAP
Financial Measures.”
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2 Per share net income before after-tax impact of
amortization of intangibles, non-recurring stock-based
compensation, restructuring costs, the lease exit charge and debt
repayment and refinancing expenses. See Table 14 titled
"Reconciliation of Adjusted Net Income and Adjusted EPS to Net
Income and EPS (unaudited)" and information about the use of
non-GAAP financial information provided under "Notes Regarding the
Use of Non-GAAP Financial Measures.”
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3 For the purposes of analyzing revenue and Run Rate
trends, organic growth comparisons exclude the impact of the
acquisitions of IPD Group Limited (“IPD”) and Investor Force
Holdings, Inc. (“InvestorForce”), as well as the sale of the CFRA
product line.
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“MSCI’s revenues and run rate continued to grow in the second quarter of
2013, aided by the acquisitions of IPD and InvestorForce, continued
strength in our retention rates and a modest increase in new sales. We
are working hard to bring the full value of MSCI’s unique products and
services to our clients and I am excited by the opportunities we see to
add value to our clients’ investment processes. We will continue to make
investments in our business over the second half of 2013 and beyond in
order to realize that potential,” Henry A. Fernandez, Chairman and CEO,
said.
“The new $100 million ASR agreement that we are announcing today
confirms our commitment to return capital to our shareholders. MSCI’s
strong cash flow has enabled us to return capital and make strategic
acquisitions like IPD and InvestorForce while continuing to invest in
our organic growth,” added Mr. Fernandez.
Summary of Results for Second Quarter 2013 Compared to Second Quarter
2012
Operating Revenues – See Table 4
Operating revenues for the three months ended June 30, 2013 (“second
quarter 2013”) increased $19.3 million, or 8.1%, to $257.9 million
compared to $238.6 million for the three months ended June 30, 2012
(“second quarter 2012”). For the purposes of analyzing revenue trends,
organic growth comparisons exclude the impact of the acquisitions of IPD
Group Limited (“IPD”) and Investor Force Holdings, Inc.
(“InvestorForce”), acquired on November 30, 2012 and January 29, 2013,
respectively, as well as the sale of the CFRA product line on March 31,
2013. On an organic basis, operating revenues grew by 1.0%.
Second quarter 2013 recurring subscription revenues rose $15.4 million,
or 7.8%, to $213.5 million and 0.4% on an organic basis. Asset-based
fees increased $2.9 million, or 8.4%, to $37.0 million and non-recurring
revenues rose $1.1 million to $7.4 million.
Performance and Risk segment revenues rose $20.8 million to
$228.4 million, an increase of 10.0% and 0.8% on an organic basis. The
increase was primarily driven by increases in equity index and
environmental, social and governance (“ESG”) products.
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Index and ESG products: Index and ESG product revenues
increased $22.2 million, or 20.2%, to $132.2 million. Subscription
revenues grew by $19.4 million, or 25.5%, to $95.2 million, driven
mostly by the acquisition of IPD. On an organic basis, index and
ESG subscription revenue growth was 3.1%, primarily attributable
to growth in our benchmark products.
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IPD contributed $17.0 million of revenues to second quarter 2013
index and ESG subscription revenues. The second quarter is expected
to be the highest quarter for IPD revenues, reflecting when a
substantial portion of its annual report products are delivered to
clients.
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Revenues attributable to equity index asset-based fees rose $2.9
million, or 8.4%, to $37.0 million, largely as a result of higher
revenues from non-ETF passive funds and a change in the mix of ETFs
linked to MSCI indices. Included in second quarter 2013 were
revenues of $0.8 million related to Vanguard ETFs that have switched
away from MSCI indices in 2013 (“the Vanguard ETFs”). That
transition is now complete.
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Risk management analytics: Revenues related to risk
management analytics products increased $2.6 million, or 4.0%, to
$67.1 million, driven largely by the acquisition of InvestorForce.
On an organic basis, revenues grew by 0.5%.
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Portfolio management analytics: Revenues related to
portfolio management analytics products declined $3.2 million, or
11.0%, to $26.1 million as a result of lower sales and elevated
cancellations of equity analytics products in prior periods.
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Energy and commodity analytics: Revenues from energy and
commodity analytics products were $3.1 million, down $0.7 million
from second quarter 2012, as a result of lower sales and elevated
cancellations of energy and commodity analytics products in prior
periods.
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Governance segment revenues fell $1.5 million, or 4.9%, to $29.5
million in second quarter 2013, as the loss of revenues resulting from
the sale of the CFRA product line more than offset organic growth. On an
organic basis, Governance revenues rose 3.0%, driven by higher revenues
from advisory compensation data and analytics products.
Operating Expenses – See Table 6
Total operating expenses rose $9.3 million, or 6.1%, to $160.7 million,
substantially driven by higher costs from recent acquisitions.
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Compensation costs: Total compensation costs rose $7.9
million, or 8.5%, to $101.7 million in second quarter 2013, driven
primarily by the acquisitions of IPD and InvestorForce, offset by
the sale of the CFRA product line and a decline in other
compensation expenses.
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Non-compensation costs excluding depreciation and amortization,
the lease exit charge and restructuring costs:
Non-compensation costs rose $2.5 million, or 6.8%, to $39.7
million in second quarter 2013. The increase in non-compensation
costs was driven by the acquisitions of IPD and InvestorForce as
well as higher marketing, travel and entertainment expenses,
offset by declines in occupancy, information technology costs and
professional fees.
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Depreciation and amortization: Amortization of intangibles
expense totaled $14.5 million compared to $16.0 million in second
quarter 2012, a decline of 9.1%, primarily due to certain
intangibles becoming fully amortized since the prior period,
partially offset by additional amortization related to the IPD and
InvestorForce acquisitions. Depreciation and amortization of
property, equipment and leasehold improvements rose $0.6 million,
or 12.5%, to $5.2 million.
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Other Expense (Income), Net
Other expense (income), net for second quarter 2013 was $5.9 million, a
decline of $23.9 million from second quarter 2012. Interest expense fell
by $23.1 million to $6.5 million. Second quarter 2012 interest expense
included an expense of $20.6 million resulting from MSCI refinancing its
indebtedness. Excluding the impact of the $20.6 million charge in the
prior period, other expense (income), net declined $3.3 million as a
result of lower indebtedness and lower interest rates.
Provision for Income Taxes
Income tax expense was $30.2 million in second quarter 2013, up 53.2%
from second quarter 2012. The effective tax rate in second quarter 2013
fell to 33.1% from 34.4% a year ago.
Net Income and Earnings per Share – See Table 14
Net income rose $23.5 million, or 62.6%, to $61.1 million for second
quarter 2013. The net income margin increased to 23.7% from 15.7% as a
result of the higher operating profit margin and lower interest costs.
Diluted EPS rose by $0.20, or 66.7%, to $0.50, driven by higher net
income and a 1.0% decline in the weighted average of diluted shares
outstanding in second quarter 2013. Adjusted net income, which excludes
the after-tax impact of amortization of intangibles, non-recurring
stock-based compensation expense, debt repayment and refinancing
expenses, the lease exit charge and restructuring costs, rose $8.9
million, or 14.5%, to $70.5 million. Adjusted EPS, which excludes the
after-tax, per share impact of amortization of intangibles,
non-recurring stock-based compensation expense, debt repayment and
refinancing expenses, the lease exit charge and restructuring costs
totaling $0.08, rose $0.08, or 16.0%, to $0.58.
See Table 14 titled “Reconciliation of Adjusted Net Income and Adjusted
EPS to Net Income and EPS (unaudited)” and “Notes Regarding the Use of
Non-GAAP Financial Measures” below.
Adjusted EBITDA – See Table 13
Adjusted EBITDA, which excludes income taxes, other net expense and
income, depreciation, amortization, non-recurring stock-based
compensation, the lease exit charge and restructuring costs, was $116.6
million, up $8.7 million, or 8.0%, from second quarter 2012. The
Adjusted EBITDA margin remained 45.2%. Second quarter 2013 Adjusted
EBITDA and Adjusted EBITDA margin benefited from the seasonal strength
in IPD revenues.
By segment, Adjusted EBITDA for the Performance and Risk segment
increased $6.2 million, or 6.1%, to $108.8 million in second quarter
2013. The Adjusted EBITDA margin for this segment fell to 47.6% from
49.4%. Adjusted EBITDA for the Governance segment increased $2.4
million, or 45.7%, to $7.7 million and the Adjusted EBITDA margin rose
to 26.3% from 17.2%. The increase in Governance segment Adjusted EBITDA
was driven by a reduction in severance, occupancy and information
technology costs compared to second quarter 2012.
See Table 13 titled “Reconciliation of Adjusted EBITDA to Net Income
(unaudited)” and “Notes Regarding the Use of Non-GAAP Financial
Measures” below.
Summary of Results for Six Months Ended June 30, 2013 compared to Six
Months Ended June 30, 2012
Operating Revenues – See Table 5
Total operating revenues for the six months ended June 30, 2013 (“six
months 2013”) increased $42.2 million, or 9.0%, to $509.8 million
compared to $467.6 million for the six months ended June 30, 2012 (“six
months 2012”). Total subscription revenues rose $37.4 million, or 9.7%,
to $422.1 million, while asset-based fees rose $4.8 million, or 7.0%, to
$73.5 million. Total non-recurring revenues were unchanged at $14.2
million. On an organic basis, total operating revenues grew by 3.4%.
Performance and Risk segment revenues rose $42.2 million, or 10.4%, to
$447.9 million for six months 2013, and 3.3% on an organic basis. Index
and ESG products and risk management analytics revenues grew 17.3% and
4.5%, respectively, in six months 2013, or organically by 5.7% and 1.5%,
respectively. Portfolio management analytics revenues fell 8.0%. Energy
and other commodity analytics revenues increased $3.7 million, or
150.3%, primarily as a result of a $5.2 million non-cash cumulative
revenue reduction to correct an error that was recorded in first quarter
2012. Excluding the impact of that error, energy and commodity analytics
revenues declined 19.2%.
Governance revenues were $61.9 million, essentially flat versus six
months 2012. On an organic basis, revenue grew by 4.0%.
Operating Expenses – See Table 7
Total operating expenses increased $22.6 million, or 7.5%, to $322.1
million in six months 2013 compared to six months 2012 driven primarily
by the acquisitions of IPD and InvestorForce. The increase largely
reflects increases of $22.1 million, or 11.9%, in total compensation
expenses and $2.4 million, or 3.4%, in non-compensation expenses offset
by a decline of $1.7 million, or 4.1%, in total depreciation and
amortization expenses.
Other Expense (Income), Net
Other expense (income), net for six months 2013 was $12.9 million, a
decline of $29.7 million from six months 2012. Other expense (income),
net includes debt repayment and refinancing expenses of $20.6 million in
six months 2012. Excluding the change in debt repayment and refinancing
expenses, other expense (income), net declined by $9.1 million in six
months 2013 primarily as a result of a combination of lower levels of
indebtedness and a lower cost of debt.
Provision for Income Taxes
The provision for income tax expense was $54.8 million in six months
2013, up $10.8 million from six months 2012. Year to date 2013 income
tax expense benefited from discrete items of $3.9 million primarily
related to a reduction in state taxes and the 2012 reinstatement of the
research and development tax credit. The effective tax rate was 31.4% in
six months 2013, versus 35.1% a year ago.
Net Income and Earnings per Share – See Table 14
Net income increased $38.5 million, or 47.2%, to $120.0 million and the
net income margin increased to 23.5% from 17.4%. Diluted EPS rose 48.5%
to $0.98 from $0.66.
Adjusted net income, which excludes the after-tax impact of amortization
of intangibles, non-recurring stock-based compensation expense, debt
repayment and refinancing expenses, the lease exit charge and
restructuring costs totaling $19.7 million, rose $23.5 million, or
20.2%, to $139.6 million. Adjusted EPS, which excludes the after-tax,
per share impact of amortization of intangibles, non-recurring
stock-based compensation expense, debt repayment and refinancing
expenses, the lease exit charge and restructuring costs totaling $0.16,
rose 21.3% to $1.14 in six months 2013.
See Table 14 titled “Reconciliation of Adjusted Net Income and Adjusted
EPS to Net Income and EPS (unaudited)” and “Notes Regarding the Use of
Non-GAAP Financial Measures” below.
Adjusted EBITDA – See Table 13
Adjusted EBITDA was $226.7 million, an increase of $16.8 million, or
8.0%, from six months 2012. Adjusted EBITDA margin fell slightly to
44.5% from 44.9%.
By segment, Adjusted EBITDA for the Performance and Risk segment
increased $14.0 million, or 7.1%, to $210.8 million from six months
2012. Adjusted EBITDA margin declined to 47.1% in six months 2013 from
48.5% in six months 2012. Adjusted EBITDA for the Governance segment
rose $2.8 million, or 21.8%, to $15.9 million in six months 2013. The
Adjusted EBITDA Margin for the Governance segment was 25.7%, up from
21.0% in six months 2012.
See Table 13 titled “Reconciliation of Adjusted EBITDA to Net Income
(unaudited)” and “Notes Regarding the Use of Non-GAAP Financial
Measures” below.
Key Operating Metrics – See Tables 10, 11, 12
Total Run Rate grew by $73.0 million, or 7.9%, to $992.6 million as of
June 30, 2013 compared to June 30, 2012. For the purposes of analyzing
changes in Run Rate, organic growth comparisons exclude the impact of
the acquisitions of IPD and InvestorForce, as well as the sale of the
CFRA product line, which was sold on March 31, 2013. On an organic
basis, total subscription Run Rate grew by 3.7%. Changes in foreign
currency rates over the past twelve months negatively impacted Run Rate
by $6.0 million, including $1.3 million relative to first quarter 2013.
Performance and Risk segment Run Rate grew by $75.3 million, or
9.3%, to $880.9 million. On an organic basis, Performance and Risk Run
Rate grew by 3.1%.
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Index and ESG products: Index and ESG subscription Run Rate
grew by $65.2 million, or 22.8%, to $350.8 million. On an organic
basis, Run Rate grew by 8.7%, driven by growth in equity index
benchmark and data products. Changes in foreign currency rates
lowered Run Rate growth by $2.5 million from the beginning of
2013, with most of that impact coming in the first quarter.
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Run Rate attributable to asset-based fees rose $2.7 million, or
2.1%, to $131.7 million. The increase was primarily driven by higher
market performance and inflows into ETFs linked to MSCI indices,
offset, in part, by the impact of the index switch of the Vanguard
ETFs. Excluding the Run Rate attributable to the Vanguard ETFs at
June 30, 2012, asset-based fee Run Rate grew by $24.3 million, or
22.6%.
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As of June 30, 2013, AUM in ETFs linked to MSCI indices were $269.7
billion, down $57.7 billion, or 17.6%, from June 30, 2012 and down
$87.6 billion, or 24.5%, from March 31, 2013. Excluding the Vanguard
ETFs which completed their transition during the second quarter
2013, AUM in MSCI-linked ETFs rose $59.6 billion, or 28.4%, from
June 30, 2012 and decreased $15.7 billion, or 5.5%, from March 31,
2013.
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During second quarter 2013, MSCI-linked ETFs were impacted by market
declines of $13.2 billion and net inflows of $0.4 billion. The
transitioning of the last of the Vanguard ETFs resulted in a loss of
$74.8 billion of AUM in the quarter.
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Risk management analytics: Run Rate related to risk
management analytics products increased $22.0 million, or 8.5%, to
$281.0 million. On an organic basis, risk management analytics Run
Rate grew by 4.6%. MSCI benefited from solid growth in Run Rate
associated with its RiskManager and BarraOne products.
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Portfolio management analytics: Run Rate related to
portfolio management analytics products declined $12.6 million, or
10.8%, to $104.5 million. Year-over-year Run Rate was negatively
impacted by product swaps totaling $2.6 million and by changes in
foreign currency rates which lowered Run Rate by an additional
$3.3 million, including $0.7 million relative to first quarter
2013.
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Energy and commodity analytics: Run Rate from energy and
commodity analytics products declined to $12.8 million, down $2.0
million, or 13.8%, from second quarter 2012.
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Governance Run Rate declined by $2.3 million, or 2.0%, to $111.7
million. On an organic basis, Run Rate grew by 6.0%, reflecting strong
growth in the Run Rate of corporate compensation data and analytics
products and services and modest growth in the Run Rate of proxy
research and voting services.
Accelerated Share Repurchase Agreements
On July 31, 2013, MSCI settled the $100.0 million ASR agreement entered
into with Morgan Stanley & Co. LLC (“Morgan Stanley”) on December 14,
2012 in accordance with its terms. Pursuant to the ASR agreement, MSCI
repurchased a total of 2,988,117 shares of its common stock, which
included an initial delivery of 2,226,028 shares in December 2012 and
762,089 shares delivered at settlement. The average purchase price for
the shares was $33.47 per share. The repurchased shares will be held in
treasury.
MSCI intends to enter into another $100.0 million ASR agreement with
Morgan Stanley, following the close of today’s market, which will begin
immediately. Under this new ASR agreement, MSCI will pay Morgan Stanley
$100.0 million in cash and receive from Morgan Stanley an initial
delivery of shares of its common stock on August 2, 2013 and may receive
from Morgan Stanley additional shares at or prior to maturity of the ASR
agreement, which MSCI anticipates will be no later than December 2013.
Both of the ASR agreements were authorized pursuant to a $300.0 million
share repurchase program approved by MSCI’s Board of Directors in 2012.
The remaining $100.0 million balance of the authorization will be
available for utilization from time to time through 2014 at management’s
discretion.
Conference Call Information
Investors will have the opportunity to listen to MSCI Inc.'s senior
management review second quarter 2013 results on Thursday, August 1,
2013 at 11:00 am Eastern Time. To listen to the live event, visit the
investor relations section of MSCI's website, http://ir.msci.com/events.cfm,
or dial 1-877-312-9206 within the United States. International callers
dial 1-408-774-4001.
An audio recording of the conference call will be available on our
website approximately two hours after the conclusion of the live event
and will be accessible through August 3, 2013. To listen to the
recording, visit http://ir.msci.com/events.cfm, or dial
1-855-859-2056 (passcode: 17528956) within the United States.
International callers dial 1-404-537-3406 (passcode: 17528956).
About MSCI
MSCI Inc. is a leading provider of investment decision support tools to
investors globally, including asset managers, banks, hedge funds and
pension funds. MSCI products and services include indices, portfolio
risk and performance analytics, and governance tools.
The company’s flagship product offerings are: the MSCI indices with
approximately USD 7 trillion estimated to be benchmarked to them on a
worldwide basis1; Barra multi-asset class factor models,
portfolio risk and performance analytics; RiskMetrics multi-asset class
market and credit risk analytics; IPD real estate information, indices
and analytics; MSCI ESG (environmental, social and governance) Research
screening, analysis and ratings; ISS governance research and outsourced
proxy voting and reporting services; and FEA valuation models and risk
management software for the energy and commodities markets. MSCI is
headquartered in New York, with research and commercial offices around
the world. MSCI#IR
1As of September 30, 2012, as reported by
eVestment, Lipper and Bloomberg on January 31, 2013
For further information on MSCI, please visit our website at www.msci.com
Forward-Looking Statements
This earnings release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements relate to future events or to future financial performance
and involve known and unknown risks, uncertainties and other factors
that may cause our actual results, levels of activity, performance, or
achievements to be materially different from any future results, levels
of activity, performance, or achievements expressed or implied by these
forward-looking statements. In some cases, you can identify
forward-looking statements by the use of words such as "may," "could,"
"expect," "intend," "plan," "seek," "anticipate," "believe," "estimate,"
"predict," "potential," or "continue," or the negative of these terms or
other comparable terminology. You should not place undue reliance on
forward-looking statements because they involve known and unknown risks,
uncertainties and other factors that are, in some cases, beyond our
control and that could materially affect actual results, levels of
activity, performance, or achievements.
Other factors that could materially affect actual results, levels of
activity, performance or achievements can be found in MSCI's Annual
Report on Form 10-K for the fiscal year ended December 31, 2012 filed
with the Securities and Exchange Commission ("SEC") on March 1, 2013,
and in quarterly reports on Form 10-Q and current reports on Form 8-K
filed with the SEC. If any of these risks or uncertainties materialize,
or if our underlying assumptions prove to be incorrect, actual results
may vary significantly from what MSCI projected. Any forward-looking
statement in this release reflects MSCI's current views with respect to
future events and is subject to these and other risks, uncertainties and
assumptions relating to MSCI's operations, results of operations, growth
strategy and liquidity. MSCI assumes no obligation to publicly update or
revise these forward-looking statements for any reason, whether as a
result of new information, future events, or otherwise, except as
required by law.
Website and Social Media Disclosure
MSCI uses its website and corporate Twitter account (@MSCI_Inc) as
channels of distribution of company information. The information we post
through these channels may be deemed material. Accordingly, investors
should monitor these channels, in addition to following our press
releases, SEC filings and public conference calls and webcasts. In
addition, you may automatically receive email alerts and other
information about MSCI when you enroll your email address by visiting
the “Email Alert Subscription” section at http://ir.msci.com/alerts.cfm?.
The contents of MSCI's website and social media channels are not,
however, incorporated by reference into this earnings release.
Notes Regarding the Use of Non-GAAP Financial Measures
MSCI has presented supplemental non-GAAP financial measures as part of
this earnings release. A reconciliation is provided that reconciles each
non-GAAP financial measure with the most comparable GAAP measure. The
presentation of non-GAAP financial measures should not be considered as
alternative measures for the most directly comparable GAAP financial
measures. These measures are used by management to monitor the financial
performance of the business, inform business decision making and
forecast future results.
Adjusted EBITDA is defined as net income before provision for income
taxes, other net expense and income, depreciation and amortization,
non-recurring stock-based compensation expense, the lease exit charge
and restructuring costs.
Adjusted net income and Adjusted EPS are defined as net income and EPS,
respectively, before provision for non-recurring stock-based
compensation expenses, amortization of intangible assets, restructuring
costs, the lease exit charge and the accelerated amortization or
write-off of deferred financing and debt discount costs as a result of
debt repayment (debt repayment and refinancing expenses), as well as for
any related tax effects.
We believe that adjustments related to the lease exit charge,
restructuring costs and debt repayment and refinancing expenses are
useful to management and investors because it allows for an evaluation
of MSCI’s underlying operating performance. Additionally, we believe
that adjusting for non-recurring stock-based compensation expenses, debt
repayment and refinancing expenses and depreciation and amortization may
help investors compare our performance to that of other companies in our
industry as we do not believe that other companies in our industry have
as significant a portion of their operating expenses represented by
these items. We believe that the non-GAAP financial measures presented
in this earnings release facilitate meaningful period-to-period
comparisons and provide a baseline for the evaluation of future results.
Adjusted EBITDA, Adjusted net income and Adjusted EPS are not defined in
the same manner by all companies and may not be comparable to other
similarly titled measures of other companies.
|
Table 2: MSCI Inc. Condensed Consolidated Statement of Income
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
June 30,
|
|
In thousands, except per share data
|
|
2013
|
|
2012
|
|
2013
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
257,898
|
|
|
$
|
238,565
|
|
|
$
|
251,909
|
|
|
$
|
509,807
|
|
|
$
|
467,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
|
83,359
|
|
|
|
73,243
|
|
|
|
80,185
|
|
|
|
163,544
|
|
|
|
145,534
|
|
|
Selling, general and administrative
|
|
|
57,612
|
|
|
|
57,602
|
|
|
|
61,631
|
|
|
|
119,243
|
|
|
|
113,038
|
|
|
Restructuring costs
|
|
|
-
|
|
|
|
(22
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(51
|
)
|
|
Amortization of intangible assets
|
|
|
14,509
|
|
|
|
15,959
|
|
|
|
14,486
|
|
|
|
28,995
|
|
|
|
31,918
|
|
|
Depreciation and amortization of property,
|
|
|
|
|
|
|
|
|
|
equipment and leasehold improvements
|
|
|
5,246
|
|
|
|
4,662
|
|
|
|
5,080
|
|
|
|
10,326
|
|
|
|
9,078
|
|
|
Total operating expenses
|
|
$
|
160,726
|
|
|
$
|
151,444
|
|
|
$
|
161,382
|
|
|
$
|
322,108
|
|
|
$
|
299,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
97,172
|
|
|
$
|
87,121
|
|
|
$
|
90,527
|
|
|
$
|
187,699
|
|
|
$
|
168,100
|
|
|
Operating margin
|
|
|
37.7
|
%
|
|
|
36.5
|
%
|
|
|
35.9
|
%
|
|
|
36.8
|
%
|
|
|
35.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
(237
|
)
|
|
|
(237
|
)
|
|
|
(268
|
)
|
|
|
(505
|
)
|
|
|
(460
|
)
|
|
Interest expense
|
|
|
6,504
|
|
|
|
29,581
|
|
|
|
7,020
|
|
|
|
13,524
|
|
|
|
41,936
|
|
|
Other expense (income)
|
|
|
(354
|
)
|
|
|
516
|
|
|
|
224
|
|
|
|
(130
|
)
|
|
|
1,124
|
|
|
Other expenses (income), net
|
|
$
|
5,913
|
|
|
$
|
29,860
|
|
|
$
|
6,976
|
|
|
$
|
12,889
|
|
|
$
|
42,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
91,259
|
|
|
|
57,261
|
|
|
|
83,551
|
|
|
|
174,810
|
|
|
|
125,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
30,206
|
|
|
|
19,715
|
|
|
|
24,614
|
|
|
|
54,820
|
|
|
|
43,988
|
|
|
Net income
|
|
$
|
61,053
|
|
|
$
|
37,546
|
|
|
$
|
58,937
|
|
|
$
|
119,990
|
|
|
$
|
81,512
|
|
|
Net income margin
|
|
|
23.7
|
%
|
|
|
15.7
|
%
|
|
|
23.4
|
%
|
|
|
23.5
|
%
|
|
|
17.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per basic common share
|
|
$
|
0.50
|
|
|
$
|
0.31
|
|
|
$
|
0.49
|
|
|
$
|
0.99
|
|
|
$
|
0.66
|
|
|
Earnings per diluted common share
|
|
$
|
0.50
|
|
|
$
|
0.30
|
|
|
$
|
0.48
|
|
|
$
|
0.98
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding used
|
|
|
|
|
|
|
|
|
|
in computing earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
121,149
|
|
|
|
122,030
|
|
|
|
120,746
|
|
|
|
120,949
|
|
|
|
121,892
|
|
|
Diluted
|
|
|
122,069
|
|
|
|
123,295
|
|
|
|
121,702
|
|
|
|
121,887
|
|
|
|
123,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3: MSCI Inc. Selected Balance Sheet Items (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
|
|
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
In thousands
|
|
|
|
|
|
2013
|
|
2013
|
|
2012
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
|
334,701
|
|
|
$
|
263,029
|
|
|
$
|
183,309
|
|
|
Short-term investments
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
70,898
|
|
|
Accounts receivable, net of allowances
|
|
|
|
|
|
|
160,101
|
|
|
|
166,915
|
|
|
|
153,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred revenue
|
|
|
|
|
|
$
|
347,470
|
|
|
$
|
350,470
|
|
|
$
|
308,022
|
|
|
Current maturities of long-term debt
|
|
|
|
|
|
|
43,118
|
|
|
|
43,106
|
|
|
|
43,093
|
|
|
Long-term debt, net of current maturities
|
|
|
|
|
|
775,072
|
|
|
|
785,856
|
|
|
|
811,623
|
|
|
Table 4: Quarterly Operating Revenues by Product Category and
Revenue Type (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
% Change from
|
|
|
|
|
June 30,
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
March 31,
|
|
In thousands
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
Index and ESG products
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriptions
|
|
$
|
95,200
|
|
$
|
75,829
|
|
$
|
84,888
|
|
|
25.5
|
%
|
|
12.1
|
%
|
|
|
Asset-based fees
|
|
|
36,970
|
|
|
34,094
|
|
|
36,515
|
|
|
8.4
|
%
|
|
1.2
|
%
|
|
Index and ESG products total
|
|
|
132,170
|
|
|
109,923
|
|
|
121,403
|
|
|
20.2
|
%
|
|
8.9
|
%
|
|
Risk management analytics
|
|
|
67,099
|
|
|
64,547
|
|
|
67,274
|
|
|
4.0
|
%
|
|
(0.3
|
%)
|
|
Portfolio management analytics
|
|
|
26,089
|
|
|
29,326
|
|
|
27,646
|
|
|
(11.0
|
%)
|
|
(5.6
|
%)
|
|
Energy and commodity analytics
|
|
|
3,065
|
|
|
3,780
|
|
|
3,146
|
|
|
(18.9
|
%)
|
|
(2.6
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Performance and Risk revenues
|
|
$
|
228,423
|
|
$
|
207,576
|
|
$
|
219,469
|
|
|
10.0
|
%
|
|
4.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Governance revenues
|
|
|
29,475
|
|
|
30,989
|
|
|
32,440
|
|
|
(4.9
|
%)
|
|
(9.1
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues
|
|
$
|
257,898
|
|
$
|
238,565
|
|
$
|
251,909
|
|
|
8.1
|
%
|
|
2.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring subscriptions
|
|
$
|
213,502
|
|
$
|
198,104
|
|
$
|
208,625
|
|
|
7.8
|
%
|
|
2.3
|
%
|
|
|
Asset-based fees
|
|
|
36,970
|
|
|
34,094
|
|
|
36,515
|
|
|
8.4
|
%
|
|
1.2
|
%
|
|
|
Non-recurring revenue
|
|
|
7,426
|
|
|
6,367
|
|
|
6,769
|
|
|
16.6
|
%
|
|
9.7
|
%
|
|
Total operating revenues
|
|
$
|
257,898
|
|
$
|
238,565
|
|
$
|
251,909
|
|
|
8.1
|
%
|
|
2.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 5: Six Months Operating Revenues by Product Category and
Revenue Type (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
% Change from
|
|
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
In thousands
|
|
|
|
|
|
2013
|
|
2012
|
|
2012
|
|
Index and ESG products
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriptions
|
|
|
|
|
|
$
|
180,088
|
|
$
|
147,468
|
|
|
22.1
|
%
|
|
|
Asset-based fees
|
|
|
|
|
|
|
73,485
|
|
|
68,703
|
|
|
7.0
|
%
|
|
Index and ESG products total
|
|
|
|
|
|
|
253,573
|
|
|
216,171
|
|
|
17.3
|
%
|
|
Risk management analytics
|
|
|
|
|
|
|
134,373
|
|
|
128,624
|
|
|
4.5
|
%
|
|
Portfolio management analytics
|
|
|
|
|
|
|
53,735
|
|
|
58,389
|
|
|
(8.0
|
%)
|
|
Energy and commodity analytics
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring Energy and commodity analytics
|
|
|
|
|
|
|
6,211
|
|
|
7,684
|
|
|
(19.2
|
%)
|
|
|
Correction1
|
|
|
|
|
|
|
-
|
|
|
(5,203
|
)
|
|
(100.0
|
%)
|
|
Net energy and commodity analytics
|
|
|
|
|
|
|
6,211
|
|
|
2,481
|
|
|
150.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Performance and Risk revenues
|
|
|
|
|
|
$
|
447,892
|
|
$
|
405,665
|
|
|
10.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Governance revenues
|
|
|
|
|
|
|
61,915
|
|
|
61,952
|
|
|
(0.1
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues
|
|
|
|
|
|
$
|
509,807
|
|
$
|
467,617
|
|
|
9.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring subscriptions
|
|
|
|
|
|
$
|
422,127
|
|
$
|
384,740
|
|
|
9.7
|
%
|
|
|
Asset-based fees
|
|
|
|
|
|
|
73,485
|
|
|
68,703
|
|
|
7.0
|
%
|
|
|
Non-recurring revenue
|
|
|
|
|
|
|
14,195
|
|
|
14,174
|
|
|
0.1
|
%
|
|
Total operating revenues
|
|
|
|
|
|
$
|
509,807
|
|
$
|
467,617
|
|
|
9.0
|
%
|
|
1 In first quarter 2012, MSCI recorded a non-cash $5.2
million cumulative revenue reduction to correct an error related to
energy and commodity analytics revenues previously reported prior to
January 1, 2012. MSCI’s previous policy had resulted in the
immediate recognition of a substantial portion of the revenue
related to a majority of its contracts rather than amortizing that
revenue over the life of that contract, which is now the method of
recognition.
n/m = not meaningful
|
|
Table 6: Quarterly Operating Expense Detail (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
% Change from
|
|
|
|
June 30,
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
March 31,
|
|
In thousands
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
Cost of services
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
|
$
|
61,768
|
|
|
$
|
55,492
|
|
|
$
|
61,149
|
|
11.3
|
%
|
|
1.0
|
%
|
|
Non-recurring stock based compensation
|
|
-
|
|
|
|
94
|
|
|
|
-
|
|
(100.0
|
%)
|
|
n/m
|
|
|
Total compensation
|
|
$
|
61,768
|
|
|
$
|
55,586
|
|
|
$
|
61,149
|
|
11.1
|
%
|
|
1.0
|
%
|
|
Non-compensation
|
|
|
21,734
|
|
|
|
17,657
|
|
|
|
19,036
|
|
23.1
|
%
|
|
14.2
|
%
|
|
Lease exit charge1
|
|
|
(143
|
)
|
|
|
-
|
|
|
|
-
|
|
n/m
|
|
|
n/m
|
|
|
Total non-compensation
|
|
|
21,591
|
|
|
|
17,657
|
|
|
|
19,036
|
|
22.3
|
%
|
|
13.4
|
%
|
|
Total cost of services
|
|
$
|
83,359
|
|
|
$
|
73,243
|
|
|
$
|
80,185
|
|
13.8
|
%
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
|
$
|
39,890
|
|
|
$
|
38,025
|
|
|
$
|
45,656
|
|
4.9
|
%
|
|
(12.6
|
%)
|
|
Non-recurring stock based compensation
|
|
-
|
|
|
|
98
|
|
|
|
-
|
|
(100.0
|
%)
|
|
n/m
|
|
|
Total compensation
|
|
$
|
39,890
|
|
|
$
|
38,123
|
|
|
$
|
45,656
|
|
4.6
|
%
|
|
(12.6
|
%)
|
|
Non-compensation
|
|
|
17,944
|
|
|
|
19,479
|
|
|
|
15,975
|
|
(7.9
|
%)
|
|
12.3
|
%
|
|
Lease exit charge1
|
|
|
(222
|
)
|
|
|
-
|
|
|
|
-
|
|
n/m
|
|
|
n/m
|
|
|
Total non-compensation
|
|
|
17,722
|
|
|
|
19,479
|
|
|
|
15,975
|
|
(9.0
|
%)
|
|
10.9
|
%
|
|
Total selling, general and administrative
|
|
$
|
57,612
|
|
|
$
|
57,602
|
|
|
$
|
61,631
|
|
0.0
|
%
|
|
(6.5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs
|
|
|
-
|
|
|
|
(22
|
)
|
|
|
-
|
|
(100.0
|
%)
|
|
n/m
|
|
|
Amortization of intangible assets
|
|
|
14,509
|
|
|
|
15,959
|
|
|
|
14,486
|
|
(9.1
|
%)
|
|
0.2
|
%
|
|
Depreciation and amortization of property,
|
|
|
|
|
|
|
|
|
|
|
equipment and leasehold improvements
|
|
|
5,246
|
|
|
|
4,662
|
|
|
|
5,080
|
|
12.5
|
%
|
|
3.3
|
%
|
|
Total operating expenses
|
|
$
|
160,726
|
|
|
$
|
151,444
|
|
|
$
|
161,382
|
|
6.1
|
%
|
|
(0.4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
|
$
|
101,658
|
|
|
$
|
93,517
|
|
|
$
|
106,805
|
|
8.7
|
%
|
|
(4.8
|
%)
|
|
Non-recurring stock-based compensation
|
|
-
|
|
|
|
192
|
|
|
|
-
|
|
(100.0
|
%)
|
|
n/m
|
|
|
Non-compensation expenses
|
|
|
39,678
|
|
|
|
37,136
|
|
|
|
35,011
|
|
6.8
|
%
|
|
13.3
|
%
|
|
Lease exit charge1
|
|
|
(365
|
)
|
|
|
-
|
|
|
|
-
|
|
n/m
|
|
|
n/m
|
|
|
Restructuring costs
|
|
|
-
|
|
|
|
(22
|
)
|
|
|
-
|
|
(100.0
|
%)
|
|
n/m
|
|
|
Amortization of intangible assets
|
|
|
14,509
|
|
|
|
15,959
|
|
|
|
14,486
|
|
(9.1
|
%)
|
|
0.2
|
%
|
|
Depreciation and amortization of property,
|
|
|
|
|
|
|
|
|
|
|
equipment and leasehold improvements
|
|
|
5,246
|
|
|
|
4,662
|
|
|
|
5,080
|
|
12.5
|
%
|
|
3.3
|
%
|
|
Total operating expenses
|
|
$
|
160,726
|
|
|
$
|
151,444
|
|
|
$
|
161,382
|
|
6.1
|
%
|
|
(0.4
|
%)
|
|
1Second quarter 2013 included a benefit of $0.4 million
associated with an occupancy lease exit charge resulting from the
consolidation of our New York offices.
n/m = not meaningful
|
|
Table 7: Six Months Operating Expense Detail (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
% Change from
|
|
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
In thousands
|
|
2013
|
|
2012
|
|
2012
|
|
Cost of services
|
|
|
|
|
|
|
|
Compensation
|
|
$
|
122,917
|
|
|
$
|
109,041
|
|
|
12.7
|
%
|
|
Non-recurring stock based compensation
|
|
|
-
|
|
|
|
362
|
|
|
(100.0
|
%)
|
|
Total compensation
|
|
$
|
122,917
|
|
|
$
|
109,403
|
|
|
12.4
|
%
|
|
Non-compensation
|
|
|
40,770
|
|
|
|
36,131
|
|
|
12.8
|
%
|
|
Lease exit charge1
|
|
|
(143
|
)
|
|
|
-
|
|
|
n/m
|
|
|
Total non-compensation
|
|
|
40,627
|
|
|
|
36,131
|
|
|
12.4
|
%
|
|
Total cost of services
|
|
$
|
163,544
|
|
|
$
|
145,534
|
|
|
12.4
|
%
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
|
|
|
Compensation
|
|
$
|
85,546
|
|
|
$
|
76,517
|
|
|
11.8
|
%
|
|
Non-recurring stock based compensation
|
|
|
-
|
|
|
|
412
|
|
|
(100.0
|
%)
|
|
Total compensation
|
|
$
|
85,546
|
|
|
$
|
76,929
|
|
|
11.2
|
%
|
|
Non-compensation
|
|
|
33,919
|
|
|
|
36,109
|
|
|
(6.1
|
%)
|
|
Lease exit charge1
|
|
|
(222
|
)
|
|
|
-
|
|
|
n/m
|
|
|
Total non-compensation
|
|
|
33,697
|
|
|
|
36,109
|
|
|
(6.7
|
%)
|
|
Total selling, general and administrative
|
|
$
|
119,243
|
|
|
$
|
113,038
|
|
|
5.5
|
%
|
|
|
|
|
|
|
|
|
|
Restructuring costs
|
|
|
-
|
|
|
|
(51
|
)
|
|
(100.0
|
%)
|
|
Amortization of intangible assets
|
|
|
28,995
|
|
|
|
31,918
|
|
|
(9.2
|
%)
|
|
Depreciation and amortization of property,
|
|
|
|
|
|
|
|
equipment and leasehold improvements
|
|
|
10,326
|
|
|
|
9,078
|
|
|
13.7
|
%
|
|
Total operating expenses
|
|
$
|
322,108
|
|
|
$
|
299,517
|
|
|
7.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
|
$
|
208,463
|
|
|
$
|
185,558
|
|
|
12.3
|
%
|
|
Non-recurring stock-based compensation
|
|
|
-
|
|
|
|
774
|
|
|
(100.0
|
%)
|
|
Non-compensation expenses
|
|
|
74,689
|
|
|
|
72,240
|
|
|
3.4
|
%
|
|
Lease exit charge1
|
|
|
(365
|
)
|
|
|
-
|
|
|
n/m
|
|
|
Restructuring costs
|
|
|
-
|
|
|
|
(51
|
)
|
|
(100.0
|
%)
|
|
Amortization of intangible assets
|
|
|
28,995
|
|
|
|
31,918
|
|
|
(9.2
|
%)
|
|
Depreciation and amortization of property,
|
|
|
|
|
|
|
|
equipment and leasehold improvements
|
|
|
10,326
|
|
|
|
9,078
|
|
|
13.7
|
%
|
|
Total operating expenses
|
|
$
|
322,108
|
|
|
$
|
299,517
|
|
|
7.5
|
%
|
|
1Six months ended 2013 included a benefit of $0.4 million
associated with an occupancy lease exit charge resulting from the
consolidation of our New York offices.
n/m = not meaningful
|
|
Table 8: Summary Quarterly Segment Information (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
% Change from
|
|
|
|
|
June 30,
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
March 31,
|
|
In thousands
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Performance and Risk
|
|
$
|
228,423
|
|
$
|
207,576
|
|
$
|
219,469
|
|
|
10.0%
|
|
4.1%
|
|
Governance
|
|
|
29,475
|
|
|
30,989
|
|
|
32,440
|
|
|
(4.9%)
|
|
(9.1%)
|
|
|
Total Operating revenues
|
|
$
|
257,898
|
|
$
|
238,565
|
|
$
|
251,909
|
|
|
8.1%
|
|
2.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income:
|
|
|
|
|
|
|
|
|
|
|
|
Performance and Risk
|
|
|
93,574
|
|
|
85,980
|
|
|
86,699
|
|
|
8.8%
|
|
7.9%
|
|
|
Margin
|
|
|
41.0%
|
|
|
41.4%
|
|
|
39.5%
|
|
|
|
|
|
Governance
|
|
|
3,598
|
|
|
1,141
|
|
|
3,828
|
|
|
215.3%
|
|
(6.0%)
|
|
|
Margin
|
|
|
12.2%
|
|
|
3.7%
|
|
|
11.8%
|
|
|
|
|
|
|
Total Operating Income
|
|
$
|
97,172
|
|
$
|
87,121
|
|
$
|
90,527
|
|
|
11.5%
|
|
7.3%
|
|
|
Margin
|
|
|
37.7%
|
|
|
36.5%
|
|
|
35.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
Performance and Risk
|
|
|
108,816
|
|
|
102,595
|
|
|
101,954
|
|
|
6.1%
|
|
6.7%
|
|
|
Margin
|
|
|
47.6%
|
|
|
49.4%
|
|
|
46.5%
|
|
|
|
|
|
Governance
|
|
|
7,746
|
|
|
5,317
|
|
|
8,139
|
|
|
45.7%
|
|
(4.8%)
|
|
|
Margin
|
|
|
26.3%
|
|
|
17.2%
|
|
|
25.1%
|
|
|
|
|
|
|
Total Adjusted EBITDA
|
|
$
|
116,562
|
|
$
|
107,912
|
|
$
|
110,093
|
|
|
8.0%
|
|
5.9%
|
|
|
Margin
|
|
|
45.2%
|
|
|
45.2%
|
|
|
43.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 9: Summary Six Months Segment Information (unaudited)
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
% Change from
|
|
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
In thousands
|
|
|
|
|
|
2013
|
|
2012
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Performance and Risk
|
|
|
|
|
|
$
|
447,892
|
|
$
|
405,665
|
|
10.4%
|
|
Governance
|
|
|
|
|
|
|
61,915
|
|
|
61,952
|
|
(0.1%)
|
|
|
Total Operating revenues
|
|
|
|
|
|
$
|
509,807
|
|
$
|
467,617
|
|
9.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income:
|
|
|
|
|
|
|
|
|
|
|
|
Performance and Risk
|
|
|
|
|
|
|
180,273
|
|
|
163,455
|
|
10.3%
|
|
|
Margin
|
|
|
|
|
|
|
40.2%
|
|
|
40.3%
|
|
|
|
Governance
|
|
|
|
|
|
|
7,426
|
|
|
4,645
|
|
59.9%
|
|
|
Margin
|
|
|
|
|
|
|
12.0%
|
|
|
7.5%
|
|
|
|
|
Total Operating Income
|
|
|
|
|
|
$
|
187,699
|
|
$
|
168,100
|
|
11.7%
|
|
|
Margin
|
|
|
|
|
|
|
36.8%
|
|
|
35.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
Performance and Risk
|
|
|
|
|
|
|
210,770
|
|
|
196,779
|
|
7.1%
|
|
|
Margin
|
|
|
|
|
|
|
47.1%
|
|
|
48.5%
|
|
|
|
Governance
|
|
|
|
|
|
|
15,885
|
|
|
13,040
|
|
21.8%
|
|
|
Margin
|
|
|
|
|
|
|
25.7%
|
|
|
21.0%
|
|
|
|
|
Total Adjusted EBITDA
|
|
|
|
|
|
$
|
226,655
|
|
$
|
209,819
|
|
8.0%
|
|
|
Margin
|
|
|
|
|
|
|
44.5%
|
|
|
44.9%
|
|
|
|
Table 10: Key Operating Metrics1 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
% Change from
|
|
|
|
|
June 30,
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
March 31,
|
|
Dollars in thousands
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Run Rates1
|
|
|
|
|
|
|
|
|
|
|
|
Index and ESG products
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription
|
|
$
|
350,833
|
|
|
$
|
285,604
|
|
|
$
|
344,267
|
|
|
22.8
|
%
|
|
1.9
|
%
|
|
|
Asset-based fees
|
|
|
131,716
|
|
|
|
129,045
|
|
|
|
134,186
|
|
|
2.1
|
%
|
|
(1.8
|
%)
|
|
Index and ESG products total
|
|
|
482,549
|
|
|
|
414,649
|
|
|
|
478,453
|
|
|
16.4
|
%
|
|
0.9
|
%
|
|
Risk management analytics
|
|
|
281,022
|
|
|
|
258,995
|
|
|
|
274,524
|
|
|
8.5
|
%
|
|
2.4
|
%
|
|
Portfolio management analytics
|
|
|
104,524
|
|
|
|
117,153
|
|
|
|
106,091
|
|
|
(10.8
|
%)
|
|
(1.5
|
%)
|
|
Energy and commodity analytics
|
|
|
12,794
|
|
|
|
14,839
|
|
|
|
13,030
|
|
|
(13.8
|
%)
|
|
(1.8
|
%)
|
|
|
Total Performance and Risk
|
|
|
880,889
|
|
|
|
805,636
|
|
|
|
872,098
|
|
|
9.3
|
%
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Governance
|
|
|
111,686
|
|
|
|
113,976
|
|
|
|
110,174
|
|
|
(2.0
|
%)
|
|
1.4
|
%
|
|
Total Run Rate
|
|
$
|
992,575
|
|
|
$
|
919,612
|
|
|
$
|
982,272
|
|
|
7.9
|
%
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription total
|
|
$
|
860,859
|
|
|
$
|
790,567
|
|
|
$
|
848,086
|
|
|
8.9
|
%
|
|
1.5
|
%
|
|
Asset-based fees total
|
|
|
131,716
|
|
|
|
129,045
|
|
|
|
134,186
|
|
|
2.1
|
%
|
|
(1.8
|
%)
|
|
Total Run Rate
|
|
$
|
992,575
|
|
|
$
|
919,612
|
|
|
$
|
982,272
|
|
|
7.9
|
%
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Recurring Subscription Sales
|
|
$
|
31,133
|
|
|
$
|
28,453
|
|
|
$
|
30,928
|
|
|
9.4
|
%
|
|
0.7
|
%
|
|
Subscription Cancellations
|
|
|
(16,082
|
)
|
|
|
(17,229
|
)
|
|
|
(16,691
|
)
|
|
(6.7
|
%)
|
|
(3.6
|
%)
|
|
|
Net New Recurring Subscription Sales
|
|
$
|
15,051
|
|
|
$
|
11,224
|
|
|
$
|
14,237
|
|
|
34.1
|
%
|
|
5.7
|
%
|
|
Non-recurring sales
|
|
$
|
6,664
|
|
|
$
|
5,099
|
|
|
$
|
8,935
|
|
|
30.7
|
%
|
|
(25.4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees
|
|
|
2,957
|
|
|
|
2,384
|
|
|
|
2,844
|
|
|
24.0
|
%
|
|
4.0
|
%
|
|
% Employees by location
|
|
|
|
|
|
|
|
|
|
|
|
Developed Market Centers
|
|
|
56
|
%
|
|
|
58
|
%
|
|
|
59
|
%
|
|
|
|
|
|
Emerging Market Centers
|
|
|
44
|
%
|
|
|
42
|
%
|
|
|
41
|
%
|
|
|
|
|
|
1 The Run Rate at a particular point in time represents
the forward-looking revenues for the next 12 months from all
subscriptions and investment product licenses we currently provide
to our clients under renewable contracts or agreements assuming all
contracts or agreements that come up for renewal are renewed and
assuming then-current currency exchange rates. For any license where
fees are linked to an investment product’s assets or trading volume,
the Run Rate calculation reflects an annualization of the most
recent periodic fee earned under such license or subscription. The
Run Rate for IPD products was approximated using the trailing 12
months of revenues primarily adjusted for estimates for
non-recurring sales, new sales and cancellations. The Run Rate does
not include fees associated with “one-time” and other non-recurring
transactions. In addition, we remove from the Run Rate the fees
associated with any subscription or investment product license
agreement with respect to which we have received a notice of
termination or non-renewal during the period and determined that
such notice evidences the client’s final decision to terminate or
not renew the applicable subscription or agreement, even though such
notice is not effective until a later date.
|
|
Table 11: ETF Assets Linked to MSCI Indices1 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended 2012
|
|
Three Months Ended 2013
|
|
Six Months Ended
|
|
In Billions
|
|
March
|
|
June
|
|
September
|
|
December
|
|
March
|
|
June
|
|
June 2012
|
|
June 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Period AUM in ETFs linked to MSCI Indices
|
|
$
|
301.6
|
|
$
|
354.7
|
|
|
$
|
327.4
|
|
$
|
363.7
|
|
|
$
|
402.3
|
|
|
$
|
357.3
|
|
|
$
|
301.6
|
|
$
|
402.3
|
|
|
Cash Inflow/Outflow2
|
|
|
15.2
|
|
|
0.3
|
|
|
|
15.2
|
|
|
25.9
|
|
|
|
(61.0
|
)
|
|
|
(74.4
|
)
|
|
|
15.5
|
|
|
(135.4
|
)
|
|
Appreciation/Depreciation
|
|
|
37.9
|
|
|
(27.6
|
)
|
|
|
21.1
|
|
|
12.7
|
|
|
|
16.0
|
|
|
|
(13.2
|
)
|
|
|
10.3
|
|
|
2.8
|
|
|
Period End AUM in ETFs linked to
MSCI Indices
|
|
$
|
354.7
|
|
$
|
327.4
|
|
|
$
|
363.7
|
|
$
|
402.3
|
|
|
$
|
357.3
|
|
|
$
|
269.7
|
|
|
$
|
327.4
|
|
$
|
269.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Average AUM in ETFs linked to
MSCI Indices
|
|
$
|
341.0
|
|
$
|
331.6
|
|
|
$
|
344.7
|
|
$
|
376.6
|
|
|
$
|
369.0
|
|
|
$
|
324.1
|
|
|
$
|
336.4
|
|
$
|
346.6
|
|
|
1 ETF assets under management calculation methodology is
ETF net asset value multiplied by shares outstanding. Source:
Bloomberg and MSCI
|
|
2 Cash Inflow/Outflow for the first and second quarter of
2013 includes the migration of $82.8 billion of AUM in 9 Vanguard
ETFs and $74.8 billion of AUM in 13 Vanguard ETFs, respectively,
that transitioned to other indices during each quarter.
|
|
Table 12: Supplemental Operating Metrics (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales & Cancellations
|
|
|
|
|
|
Three Months Ended 2012
|
|
Three Months Ended 2013
|
|
|
Six Months Ended
|
|
In thousands
|
|
|
March
|
|
June
|
|
September
|
|
December
|
|
March
|
|
June
|
|
|
June 2012
|
|
June 2013
|
|
New Recurring Subscription Sales
|
|
$33,506
|
|
|
$28,453
|
|
|
$27,164
|
|
|
$29,742
|
|
|
|
$30,928
|
|
|
$31,133
|
|
|
|
$61,959
|
|
|
$62,061
|
|
|
Subscription Cancellations
|
|
|
(13,498
|
)
|
|
(17,229
|
)
|
|
(19,134
|
)
|
|
(28,725
|
)
|
|
|
(16,691
|
)
|
|
(16,082
|
)
|
|
|
(30,727
|
)
|
|
(32,773
|
)
|
|
Net New Recurring Subscription Sales
|
|
$20,008
|
|
|
$11,224
|
|
|
$8,030
|
|
|
$1,017
|
|
|
|
$14,237
|
|
|
$15,051
|
|
|
|
$31,232
|
|
|
$29,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring sales
|
|
|
9,338
|
|
|
5,099
|
|
|
3,878
|
|
|
7,443
|
|
|
|
8,935
|
|
|
6,664
|
|
|
|
14,437
|
|
|
15,599
|
|
|
Total Sales
|
|
|
$42,844
|
|
|
$33,552
|
|
|
$31,042
|
|
|
$37,185
|
|
|
|
$39,863
|
|
|
$37,797
|
|
|
|
$76,396
|
|
|
$77,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate & Core Retention Rates
|
|
|
|
|
|
|
Three Months Ended 2012
|
|
Three Months Ended 2013
|
|
|
Six Months Ended
|
|
|
|
|
|
March
|
|
June
|
|
September
|
|
December
|
|
March
|
|
June
|
|
|
June 2012
|
|
June 2013
|
|
Aggregate Retention Rate 1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Index and ESG products
|
|
|
94.5
|
%
|
|
94.9
|
%
|
|
94.0
|
%
|
|
90.4
|
%
|
|
|
95.0
|
%
|
|
94.0
|
%
|
|
|
94.7
|
%
|
|
94.5
|
%
|
|
|
Risk management analytics
|
|
|
93.9
|
%
|
|
90.0
|
%
|
|
88.5
|
%
|
|
84.4
|
%
|
|
|
93.5
|
%
|
|
92.5
|
%
|
|
|
91.9
|
%
|
|
93.0
|
%
|
|
|
Portfolio management analytics
|
|
91.9
|
%
|
|
84.2
|
%
|
|
84.9
|
%
|
|
78.0
|
%
|
|
|
81.7
|
%
|
|
87.0
|
%
|
|
|
88.0
|
%
|
|
84.3
|
%
|
|
|
Energy & commodity analytics
|
|
|
90.2
|
%
|
|
85.5
|
%
|
|
76.6
|
%
|
|
60.4
|
%
|
|
|
90.1
|
%
|
|
86.0
|
%
|
|
|
87.8
|
%
|
|
88.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Performance and Risk
|
|
|
93.7
|
%
|
|
90.9
|
%
|
|
89.8
|
%
|
|
85.2
|
%
|
|
|
92.4
|
%
|
|
92.3
|
%
|
|
|
92.2
|
%
|
|
92.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Governance
|
|
|
88.7
|
%
|
|
92.1
|
%
|
|
91.1
|
%
|
|
83.6
|
%
|
|
|
90.0
|
%
|
|
92.9
|
%
|
|
|
90.4
|
%
|
|
91.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Aggregate Retention Rate
|
|
93.0
|
%
|
|
91.0
|
%
|
|
90.0
|
%
|
|
84.9
|
%
|
|
|
92.1
|
%
|
|
92.3
|
%
|
|
|
92.0
|
%
|
|
92.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Retention Rate 1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Index and ESG products
|
|
|
94.6
|
%
|
|
95.0
|
%
|
|
94.0
|
%
|
|
90.5
|
%
|
|
|
95.0
|
%
|
|
94.1
|
%
|
|
|
94.8
|
%
|
|
94.6
|
%
|
|
|
Risk management analytics
|
|
|
94.0
|
%
|
|
92.0
|
%
|
|
89.3
|
%
|
|
84.4
|
%
|
|
|
93.9
|
%
|
|
93.1
|
%
|
|
|
92.9
|
%
|
|
93.5
|
%
|
|
|
Portfolio management analytics
|
|
92.2
|
%
|
|
87.0
|
%
|
|
86.5
|
%
|
|
83.6
|
%
|
|
|
82.8
|
%
|
|
87.5
|
%
|
|
|
89.6
|
%
|
|
85.1
|
%
|
|
|
Energy & commodity analytics
|
|
|
90.7
|
%
|
|
85.5
|
%
|
|
77.1
|
%
|
|
60.4
|
%
|
|
|
90.1
|
%
|
|
86.0
|
%
|
|
|
88.1
|
%
|
|
88.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Performance and Risk
|
|
|
93.8
|
%
|
|
92.2
|
%
|
|
90.5
|
%
|
|
86.2
|
%
|
|
|
92.7
|
%
|
|
92.6
|
%
|
|
|
93.0
|
%
|
|
92.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Governance
|
|
|
88.7
|
%
|
|
92.2
|
%
|
|
91.2
|
%
|
|
83.8
|
%
|
|
|
90.2
|
%
|
|
92.9
|
%
|
|
|
90.4
|
%
|
|
91.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Core Retention Rate
|
|
|
93.1
|
%
|
|
92.2
|
%
|
|
90.6
|
%
|
|
85.9
|
%
|
|
|
92.4
|
%
|
|
92.6
|
%
|
|
|
92.6
|
%
|
|
92.5
|
%
|
|
1The Aggregate Retention Rates are calculated by
annualizing the cancellations for which we have received a notice of
termination or non-renewal during the applicable period and have
determined that such notice evidences the client’s final decision to
terminate or not renew the applicable subscription or agreement,
even though such notice is not effective until a later date. This
annualized cancellation figure is then divided by the subscription
Run Rate at the beginning of the year to calculate a cancellation
rate. This cancellation rate is then subtracted from 100% to derive
the annualized Aggregate Retention Rate for the applicable period.
The Aggregate Retention Rate is computed on a product-by-product
basis. Therefore, if a client reduces the number of products to
which it subscribes or switches between our products, we treat it as
a cancellation. In addition, we treat any reduction in fees
resulting from renegotiated contracts as a cancellation in the
calculation to the extent of the reduction. For the calculation of
the Core Retention Rate, the same methodology is used except the
cancellations in the applicable period are reduced by the amount of
product swaps.
|
|
Table 13: Reconciliation of Adjusted EBITDA to Net Income
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2013
|
|
Three Months Ended June 30, 2012
|
|
In thousands
|
|
Performance
and Risk
|
|
Governance
|
|
Total
|
|
Performance
and Risk
|
|
Governance
|
|
Total
|
|
Net Income
|
|
|
|
|
|
$
|
61,053
|
|
|
|
|
|
|
$
|
37,546
|
|
|
Plus:
|
Provision for income taxes
|
|
|
|
|
|
|
30,206
|
|
|
|
|
|
|
|
19,715
|
|
|
Plus:
|
Other expense (income), net
|
|
|
|
|
|
|
5,913
|
|
|
|
|
|
|
|
29,860
|
|
|
Operating income
|
|
$
|
93,574
|
|
|
$
|
3,598
|
|
|
$
|
97,172
|
|
|
$
|
85,980
|
|
|
$
|
1,141
|
|
|
$
|
87,121
|
|
|
Plus:
|
Non-recurring stock-based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
172
|
|
|
|
20
|
|
|
|
192
|
|
|
Plus:
|
Depreciation and amortization of property,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equipment and leasehold improvements
|
|
|
4,329
|
|
|
|
917
|
|
|
|
5,246
|
|
|
|
3,817
|
|
|
|
845
|
|
|
|
4,662
|
|
|
Plus:
|
Amortization of intangible assets
|
|
|
11,221
|
|
|
|
3,288
|
|
|
|
14,509
|
|
|
|
12,639
|
|
|
|
3,320
|
|
|
|
15,959
|
|
|
Plus:
|
Lease exit charge
|
|
|
(308
|
)
|
|
|
(57
|
)
|
|
|
(365
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Plus:
|
Restructuring costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(13
|
)
|
|
|
(9
|
)
|
|
|
(22
|
)
|
|
Adjusted EBITDA
|
|
$
|
108,816
|
|
|
$
|
7,746
|
|
|
$
|
116,562
|
|
|
$
|
102,595
|
|
|
$
|
5,317
|
|
|
$
|
107,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2013
|
|
Six Months Ended June 30, 2012
|
|
In thousands
|
|
Performance and Risk
|
|
Governance
|
|
Total
|
|
Performance and Risk
|
|
Governance
|
|
Total
|
|
Net Income
|
|
|
|
|
|
$
|
119,990
|
|
|
|
|
|
|
$
|
81,512
|
|
|
Plus:
|
Provision for income taxes
|
|
|
|
|
|
|
54,820
|
|
|
|
|
|
|
|
43,988
|
|
|
Plus:
|
Other expense (income), net
|
|
|
|
|
|
|
12,889
|
|
|
|
|
|
|
|
42,600
|
|
|
Operating income
|
|
$
|
180,273
|
|
|
$
|
7,426
|
|
|
$
|
187,699
|
|
|
$
|
163,455
|
|
|
$
|
4,645
|
|
|
$
|
168,100
|
|
|
Plus:
|
Non-recurring stock-based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
696
|
|
|
|
78
|
|
|
|
774
|
|
|
Plus:
|
Depreciation and amortization of property,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equipment and leasehold improvements
|
|
|
8,418
|
|
|
|
1,908
|
|
|
|
10,326
|
|
|
|
7,382
|
|
|
|
1,696
|
|
|
|
9,078
|
|
|
Plus:
|
Amortization of intangible assets
|
|
|
22,387
|
|
|
|
6,608
|
|
|
|
28,995
|
|
|
|
25,278
|
|
|
|
6,640
|
|
|
|
31,918
|
|
|
Plus:
|
Lease exit charge
|
|
|
(308
|
)
|
|
|
(57
|
)
|
|
|
(365
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Plus:
|
Restructuring costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(32
|
)
|
|
|
(19
|
)
|
|
|
(51
|
)
|
|
Adjusted EBITDA
|
|
$
|
210,770
|
|
|
$
|
15,885
|
|
|
$
|
226,655
|
|
|
$
|
196,779
|
|
|
$
|
13,040
|
|
|
$
|
209,819
|
|
|
Table 14: Reconciliation of Adjusted Net Income and Adjusted
EPS to Net Income and EPS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
June 30,
|
|
In thousands, except per share data
|
|
2013
|
|
2012
|
|
2013
|
|
2013
|
|
2012
|
|
Net Income
|
|
$
|
61,053
|
|
|
$
|
37,546
|
|
|
$
|
58,937
|
|
|
$
|
119,990
|
|
|
$
|
81,512
|
|
|
Plus:
|
Non-recurring stock-based compensation
|
|
|
-
|
|
|
|
192
|
|
|
|
-
|
|
|
|
-
|
|
|
|
774
|
|
|
Plus:
|
Amortization of intangible assets
|
|
|
14,509
|
|
|
|
15,959
|
|
|
|
14,486
|
|
|
|
28,995
|
|
|
|
31,918
|
|
|
Plus:
|
Debt repayment and refinancing expenses
|
|
|
-
|
|
|
|
20,639
|
|
|
|
-
|
|
|
|
-
|
|
|
|
20,639
|
|
|
Plus:
|
Lease exit charge
|
|
|
(365
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(365
|
)
|
|
|
-
|
|
|
Plus:
|
Restructuring costs
|
|
|
-
|
|
|
|
(22
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(51
|
)
|
|
Less:
|
Income tax effect
|
|
|
(4,711
|
)
|
|
|
(12,775
|
)
|
|
|
(4,268
|
)
|
|
|
(8,979
|
)
|
|
|
(18,648
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
$
|
70,486
|
|
|
$
|
61,539
|
|
|
$
|
69,155
|
|
|
$
|
139,641
|
|
|
$
|
116,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
$
|
0.50
|
|
|
$
|
0.30
|
|
|
$
|
0.48
|
|
|
$
|
0.98
|
|
|
$
|
0.66
|
|
|
Plus:
|
Non-recurring stock-based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.01
|
|
|
Plus:
|
Amortization of intangible assets
|
|
|
0.12
|
|
|
|
0.13
|
|
|
|
0.12
|
|
|
|
0.24
|
|
|
|
0.26
|
|
|
Plus:
|
Debt repayment and refinancing expenses
|
|
|
-
|
|
|
|
0.17
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.17
|
|
|
Plus:
|
Lease exit charge
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Plus:
|
Restructuring costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.01
|
)
|
|
Less:
|
Income tax effect
|
|
|
(0.04
|
)
|
|
|
(0.10
|
)
|
|
|
(0.03
|
)
|
|
|
(0.08
|
)
|
|
|
(0.15
|
)
|
|
Adjusted EPS
|
|
$
|
0.58
|
|
|
$
|
0.50
|
|
|
$
|
0.57
|
|
|
$
|
1.14
|
|
|
$
|
0.94
|
|
CONTACT:
MSCI Inc. Contact:
W. Edings Thibault, MSCI, New York +
1.212.804.5273
Media Inquiries:
Jo Morgan, MSCI, London +
44.20.7618.2224
Kristin Meza, MSCI, New York + 1.212.804.5330
Sally
Todd | Christian Pickel, MHP Communications, London + 44.20.3128.8100
