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Segment Information
6 Months Ended
Jun. 30, 2013
Segment Reporting [Abstract]  
Segment Information

12. SEGMENT INFORMATION

ASC Subtopic 280-10, “Segment Reporting,” establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or CODM, in deciding how to allocate resources. MSCI’s Chief Executive Officer, who is considered to be its CODM, reviews financial information presented on an operating segment basis for purposes of making operating decisions and assessing financial performance. MSCI operates as two segments, the Performance and Risk business and the Governance business. These designations have been made as the discrete operating results of these segments are reviewed by the Company’s CODM for purposes of making operating decisions and assessing financial performance.

 

The Performance and Risk business is a leading global provider of investment decision support tools, including equity indices, real estate indices and benchmarks, portfolio risk and performance analytics, credit analytics and ESG products. The business provides clients with a broad suite of products and services to assist them with managing equity, fixed income and multi-asset class portfolios. The products are used in many areas of the investment process, including portfolio construction and rebalancing, performance benchmarking and attribution, risk management and analysis, regulatory and client reporting, index-linked investment product creation, asset allocation, assessment of social responsibility, environmental stewardship and the effects of climate change on investments, investment manager selection and investment research.

The Governance business is a leading provider of corporate governance products, services and data solutions to institutional investors and corporations around the world. Among other things, the Governance business facilitates the voting of proxies by institutional investors and provides in-depth research and analysis to help inform their voting decisions and identify issuer-specific risk. It offers both global equity security coverage and fully integrated products and services, including proxy voting, policy creation, research, vote recommendations, vote execution, post-vote disclosure and reporting and analytical tools. It also provides class action monitoring and claims filing services to aid institutional investors in the recovery of funds from securities class actions. Within a firewall, a separate unit of the Governance business also provides products and services to corporate clients who may use those products and services to learn about and improve their governance and executive compensation practices.

Revenues and expenses directly associated with each respective segment are included in determining its operating results. Other expenses that are not directly attributable to a particular segment are allocated based upon allocation methodologies, including time estimates, headcount, net revenues and other relevant usage measures.

The CODM does not review any information regarding total assets on an operating segment basis. Operating segments do not record intersegment revenue, and, accordingly, there is none to be reported. The accounting policies for segment reporting are the same as for MSCI as a whole.

The following table presents MSCI’s operating segments’ results for the three and six months ended June 30, 2013 and 2012:

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2013      2012      2013      2012  
     (in thousands)  

Operating revenues

           

Performance and Risk

   $ 228,423       $ 207,576       $ 447,892       $ 405,665   

Governance

     29,475         30,989         61,915         61,952   
  

 

 

    

 

 

    

 

 

    

 

 

 

Consolidated

   $ 257,898       $ 238,565       $ 509,807       $ 467,617   
  

 

 

    

 

 

    

 

 

    

 

 

 

Amortization of intangible assets and depreciation and amortization of property, equipment and leasehold improvements

           

Performance and Risk

   $ 15,550       $ 16,456       $ 30,805       $ 32,660   

Governance

     4,205         4,165         8,516         8,336   
  

 

 

    

 

 

    

 

 

    

 

 

 

Consolidated

   $ 19,755       $ 20,621       $ 39,321       $ 40,996   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating income

           

Performance and Risk

   $ 93,574       $ 85,980       $ 180,273       $ 163,455   

Governance

     3,598         1,141         7,426         4,645   
  

 

 

    

 

 

    

 

 

    

 

 

 

Consolidated

   $ 97,172       $ 87,121       $ 187,699       $ 168,100   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

Revenue by geography is based on the shipping address of the customer. The following table sets forth revenue for the periods indicated by geographic area:

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2013      2012      2013      2012  
Revenues    (in thousands)  

Americas:

           

United States

   $ 123,634      $ 123,263       $ 248,930      $ 240,266   

Other

     8,677        8,374         17,590        15,895   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Americas

     132,311        131,637         266,520        256,161   
  

 

 

    

 

 

    

 

 

    

 

 

 

Europe, Middle East and Africa (“EMEA”):

           

United Kingdom

     35,761        28,380         72,801        56,210   

Other

     61,072        47,653         110,982        93,920   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total EMEA

     96,833        76,033         183,783        150,130   
  

 

 

    

 

 

    

 

 

    

 

 

 

Asia & Australia:

           

Japan

     12,135        14,436         25,175        28,819   

Other

     16,619        16,459         34,329        32,507   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Asia & Australia

     28,754        30,895         59,504        61,326   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 257,898      $ 238,565       $ 509,807      $ 467,617   
  

 

 

    

 

 

    

 

 

    

 

 

 

Long-lived assets consist of property, equipment, leasehold improvements, goodwill and intangible assets, net of accumulated depreciation and amortization.

The following table sets forth long-lived assets on the dates indicated by geographic area:

 

     As of  
     June 30,
2013
     December 31,
2012
 
Long-lived assets    (in thousands)  

Americas:

     

United States

   $ 2,333,166       $ 2,334,877  

Other

     4,369         4,608  
  

 

 

    

 

 

 

Total Americas

     2,337,535         2,339,485  
  

 

 

    

 

 

 

EMEA:

     

United Kingdom

     132,716         139,714  

Other

     7,753         8,749  
  

 

 

    

 

 

 

Total EMEA

     140,469         148,463  
  

 

 

    

 

 

 

Asia & Australia:

     

Japan

     303         297  

Other

     4,306         3,658  
  

 

 

    

 

 

 

Total Asia & Australia

     4,609         3,955  
  

 

 

    

 

 

 

Total

   $ 2,482,613       $ 2,491,903