MSCI Inc. (NYSE:MSCI), a leading provider of portfolio
construction and risk management tools and services for global
investors, today announced results for the three months ended
December 31, 2015 (“fourth quarter 2015”) and full-year ended
December 31, 2015 (“full-year 2015”).
Financial and Operational Highlights for Fourth Quarter
2015 (Note: Percentage and other changes refer to fourth
quarter 2014 unless otherwise noted.)
- 38.7% increase in income from
continuing operations; 8.7% increase in revenues; 0.4% decline in
operating expenses; 52.6% increase in diluted EPS from continuing
operations.
- 21.7% increase in adjusted EBITDA
and an approximate 500 basis point increase in adjusted EBITDA
margin.
- 34.7% increase in adjusted EPS to
$0.66, which includes $0.04 per share net tax benefit.
- 8.2% increase in total Run Rate to
$1,089.3 million; subscription Run Rate up 7.9% adjusting for
foreign currency exchange rate fluctuations.
- 4.0 million shares repurchased in
the quarter for a total value of $255.3 million; 1.1 million shares
repurchased after quarter-end for a total value of $73.8
million.
- $1.5 billion of capital returned to
shareholders through share repurchases and cash dividends since
2012 and through January 29, 2016 with $805.5 million of repurchase
authorization remaining.
“MSCI’s strong results in the fourth quarter reflect solid
execution across the board and the continuation of the positive
growth trajectory established in prior quarters,” commented Henry
A. Fernandez, Chairman and CEO of MSCI.
“In 2015, we made significant strides in accelerating revenue
growth, improving operational efficiency and optimizing our capital
base. We delivered an 8% increase in revenue, driven by the
continued strength of our Index product line. Our strong cost
discipline resulted in a meaningful expansion in operating
leverage, which further benefited from steps to reduce our tax
rate. Finally, MSCI returned approximately $760 million to our
shareholders and reduced the outstanding share count by 10%. Our
rigorous execution in these areas resulted in a significant
increase in profitability and earnings for MSCI.”
Mr. Fernandez added, “Based on our accomplishments in 2015 and,
more importantly, the opportunities before us, we have multiple
levers that we believe will drive our future growth and
profitability.”
Table 1: Selected Consolidated Financial and Operating
Information (unaudited)
Three Months Ended
% Change from Year Ended Dec. 31, Dec. 31, Sep. 30,
Dec. 31, Sep. 30, Dec. 31, Dec. 31, $ in thousands, except
per share and share data 2015 2014 2015 2014 2015 2015 2014
% Change Operating revenues $ 272,893 $ 251,105 $ 268,771 8.7 % 1.5
% $ 1,075,013 $ 996,680 7.9 % Operating income $ 107,543 $ 85,094 $
109,102 26.4 % (1.4 %) $ 403,898 $ 337,166 19.8 % % operating
margin 39.4 % 33.9 % 40.6 % 37.6 % 33.8 % Income from continuing
operations $ 59,999 $ 43,269 $ 64,398 38.7 % (6.8 %) $ 230,038 $
198,942 15.6 % Net Income $ 59,406 $ 44,340 $ 64,398 34.0 % (7.8 %)
$ 223,648 $ 284,113 (21.3 %) Diluted EPS from continuing
operations $ 0.58 $ 0.38 $ 0.59 52.6 % (1.7 %) $ 2.09 $ 1.70 22.9 %
Diluted EPS $ 0.57 $ 0.39 $ 0.59 46.2 % (3.4 %) $ 2.03 $ 2.43 (16.5
%) Diluted weighted average common shares outstanding 103,590
113,289 109,440 (8.6 %) (5.3 %) 109,926 116,706 (5.8 %)
Adjusted net income1 $ 68,268 $ 55,531 $ 65,726 22.9 % 3.9 % $
254,609 $ 233,667 9.0 % Adjusted EPS1 $ 0.66 $ 0.49 $ 0.60 34.7 %
10.0 % $ 2.32 $ 2.00 16.0 % Adjusted EBITDA2 $ 126,914 $ 104,305 $
128,861 21.7 % (1.5 %) $ 481,697 $ 408,754 17.8 % Adjusted EBITDA
margin 46.5 % 41.5 % 47.9 % 44.8 % 41.0 % Net cash provided by
operating activities $ 81,322 $ 104,054 $ 133,963 (21.8 %) (39.3 %)
$ 305,994 $ 305,673 0.1 % Free cash flow3 $ 62,757 $ 95,416 $
121,713 (34.2 %) (48.4 %) $ 256,842 $ 254,798 0.8 %
Employees, at period end 2,754 2,926 2,743 (5.9 %) 0.4 % %
Employees by location Developed Market Centers 47 % 49 % 48 %
Emerging Market Centers 53 % 51 % 52 %
1 Adjusted net income and adjusted EPS are
defined as net income and EPS, respectively, before income from
discontinued operations, net of income taxes, the after-tax impact
of the amortization of intangible assets, the impact of debt
repayment and refinancing expenses and the impact from the gain on
sale of investment. See Table 10 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."
2 Adjusted EBITDA is defined as net income
before income from discontinued operations, net of income taxes,
provision for income taxes, other expense (income), net,
depreciation and amortization. See Table 9 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."
3 Free cash flow is defined as net cash
provided by operating activities, less capex. Capex is defined as
capital expenditures plus capitalized software development costs.
See Table 12 titled “Reconciliation of Free Cash Flow to Net Cash
Provided by Operating Activities (unaudited)” and information about
the use of non-GAAP financial information provided under "Notes
Regarding the Use of Non-GAAP Financial Measures."
Fourth Quarter and Full-Year 2015
Consolidated Results
Revenues: Operating revenues
for fourth quarter 2015 increased $21.8 million, or 8.7%, to $272.9
million, compared to $251.1 million for the three months ended
December 31, 2014 (“fourth quarter 2014”). The $21.8 million
increase was primarily driven by a $14.8 million, or 7.4%, increase
in recurring subscription revenues, a $4.7 million, or 10.4%,
increase in asset-based fees and a $2.2 million, or 48.9%, increase
in non-recurring revenues. Adjusting for the impact of foreign
currency exchange rate fluctuations, recurring subscription
revenues for fourth quarter 2015 would have increased 8.1%.
For full-year 2015, operating revenues increased $78.3 million,
or 7.9%, to $1,075.0 million, compared to $996.7 million for the
full-year ended December 31, 2014 (“full-year 2014”). The $78.3
million increase was primarily driven by a $56.3 million, or 7.0%,
increase in recurring subscription revenues, a $20.9 million, or
11.8%, increase in asset-based fees and a $1.1 million, or 6.1%,
increase in non-recurring revenues. Adjusting for the impact of
foreign currency exchange rate fluctuations, recurring subscription
revenues for full-year 2015 would have increased 8.8%.
Run Rate: Total Run Rate at
December 31, 2015 grew by $82.5 million, or 8.2%, to $1,089.3
million, compared to December 31, 2014. The $82.5 million increase
was driven by a $56.0 million, or 6.7%, increase in subscription
Run Rate to $888.2 million and a $26.5 million, or 15.2%, increase
in asset-based fee Run Rate to $201.0 million. Subscription Run
Rate in fourth quarter 2015 would have increased 7.9%, adjusting
for the impact of foreign currency exchange rate fluctuations.
Expenses: Total operating
expenses decreased $0.7 million, or 0.4%, from fourth quarter 2014
to $165.4 million, but increased $5.7 million, or 3.6%, from the
three months ended September 30, 2015 ("third quarter 2015"). The
$0.7 million decrease compared to fourth quarter 2014 was primarily
driven by a decline in cost of revenues due to lower compensation
and benefits costs in our data services and client service and
consultant functions, partially offset by higher general and
administrative compensation costs. The $5.7 million increase
compared to third quarter 2015 was primarily driven by higher
general and administrative compensation and benefits costs and
increased development costs, as well as higher selling and
marketing support costs. Adjusted EBITDA expenses in fourth quarter
2015 decreased $0.8 million, or 0.6%, from fourth quarter 2014 to
$146.0 million, but increased $6.1 million, or 4.3%, from third
quarter 2015. Adjusting for the impact of foreign currency exchange
rate fluctuations, total operating expenses and adjusted EBITDA
expenses for fourth quarter 2015 would have increased 2.7% and
2.8%, respectively, compared to fourth quarter 2014.
For full-year 2015, total operating expenses from continuing
operations increased $11.6 million, or 1.8%, to $671.1 million. The
$11.6 million increase was primarily driven by higher depreciation
and general and administrative costs as well as higher development
costs, partially offset by lower cost of revenues and marketing.
Adjusted EBITDA expenses increased $5.4 million, and 0.9%, to
$593.3 million for full-year 2015. Adjusting for the impact of
foreign currency exchange rate fluctuations, total operating
expenses and adjusted EBITDA expenses for full-year 2015 would have
increased 5.8% and 5.2%, respectively, compared to full-year
2014.See Table 11 titled “Reconciliation of Adjusted EBITDA
Expenses to Operating Expenses (unaudited),” and “Notes Regarding
the Use of Non-GAAP Financial Measures” and “Notes Regarding
Adjusting for the Impact of Foreign Currency Exchange Rate
Fluctuations” below.
Headcount: Total
employees as of December 31, 2015 was 2,754, down 172 from the
prior year, but up 11 from the end of third quarter 2015. A total
of 47% and 53% of employees were located in developed market and
emerging market centers, respectively, compared to 49% in developed
market centers and 51% in emerging market centers at the end of the
prior year, reflecting the continuing efforts to increase the
percentage of employees in emerging market centers.
Other Expense (Income),
Net: Other expense (income), net increased $7.7
million for fourth quarter 2015 and increased $25.5 million for
full-year 2015, compared to the prior year period and the prior
year, respectively. The increases were driven primarily by higher
interest expense resulting from the private offering of $800
million aggregate principal amount of 5.25% senior notes due 2024,
completed in November 2014, and the subsequent private offering of
$800 million aggregate principal amount of 5.75% senior notes due
2025, completed in August 2015. Full-year 2015 also included a $6.3
million gain on sale of investment recognized in third quarter
2015.
Tax Rate: The
effective tax rate was 29.8% for fourth quarter 2015, compared to
38.8% for fourth quarter 2014, reflecting higher net tax benefits
mainly associated with various research and production-related
credits and deductions relating to current and prior years. The tax
benefits in the quarter positively impacted diluted EPS by $0.05
and adjusted EPS by $0.04. The effective tax rate was 34.2% for
full-year 2015, versus 35.5% for full-year 2014. The lower
full-year 2015 effective tax rate reflects a decrease in the
operating (on-going) tax rate, resulting from a more favorable mix
of US and non-US profits associated with our efforts to better
align our tax profile with our global operating footprint.
Income from Continuing
Operations: Income from continuing operations was $60.0
million in fourth quarter 2015, up $16.7 million, or 38.7%, from
fourth quarter 2014, but down $4.4 million, or 6.8%, from third
quarter 2015. Third quarter 2015 included a $6.3 million gain on
sale of investment.
For full-year 2015, income from continuing operations was $230.0
million, up 15.6% from full-year 2014.
Adjusted EBITDA:
Adjusted EBITDA, which excludes income (loss) from discontinued
operations, net of income taxes, provision for income taxes, other
expense (income), net, and depreciation and amortization, was
$126.9 million in fourth quarter 2015, up $22.6 million, or 21.7%,
from fourth quarter 2014, but down $1.9 million, or 1.5%, from
third quarter 2015. The decrease compared to third quarter 2015 was
driven by the increase in expenses discussed above. Adjusted EBITDA
margin in fourth quarter 2015 was 46.5%, compared to 41.5% in
fourth quarter 2014 and 47.9% in third quarter 2015.
For full-year 2015, adjusted EBITDA was $481.7 million, up 17.8%
from full-year 2014, and adjusted EBITDA margin was 44.8%, compared
to 41.0% for full-year 2014.See Table 9 titled “Reconciliation of
Adjusted EBITDA to Net Income (unaudited)” and “Notes Regarding the
Use of Non-GAAP Financial Measures” below.
Cash Balances & Outstanding
Debt: Total cash and cash equivalents at the end
of fourth quarter 2015 were $777.7 million, of which $128.1 million
was held outside of the United States. Since the end of fourth
quarter 2015 and through January 29, 2016, a total of $73.8 million
was used to repurchase shares. Total outstanding debt as of
December 31, 2015 was $1.6 billion, which excludes the associated
deferred financing fees of $20.6 million. Net debt, defined as
total outstanding debt less cash and cash equivalents, was $822.3
million. Total debt to adjusted EBITDA ratio (based on trailing
twelve months adjusted EBITDA) was 3.3x, consistent with the
previously stated financial policy of maintaining gross leverage
within the range of 3.0x to 3.5x.
Cash Flow &
Capex: Net cash provided by operating activities
was $81.3 million in fourth quarter 2015, compared to $104.1
million in fourth quarter 2014 and $134.0 million in third quarter
2015. The decline in both periods was primarily due to higher
payments related to interest and income taxes. Net cash provided by
operating activities for full-year 2015 was $306.0 million,
compared to $305.7 million for full-year 2014. An increase in
payments related to interest and cash taxes was offset by higher
operating results in full-year 2015. Full-year 2014 also included
cash flows from discontinued operations. Capex (defined as capital
expenditures plus capitalized software development costs) for
fourth quarter 2015 was $18.6 million, compared to $8.6 million in
fourth quarter 2014. For full-year 2015, capex was $49.2 million,
compared to $50.9 million for full-year 2014. Free cash flow
(defined as net cash provided by operating activities, less capex)
was $62.8 million in fourth quarter 2015, compared to $95.4 million
in fourth quarter 2014, and free cash flow for full-year 2015 was
$256.8 million compared to $254.8 million for full-year 2014.See
Table 12 titled “Reconciliation of Free Cash Flow to Net Cash
Provided by Operating Activities (unaudited)” and “Notes Regarding
the Use of Non-GAAP Financial Measures” below.
Share Count & Capital
Return: The weighted average diluted shares outstanding
in fourth quarter 2015 declined 8.6% to 103.6 million, compared to
113.3 million at the end of fourth quarter 2014. The decrease was
driven by buybacks under the share repurchase program. In fourth
quarter 2015, we repurchased 4.0 million shares for a total of
$255.3 million with an average price of $63.76 per share. Since the
end of fourth quarter 2015 and through January 29, 2016, an
additional 1.1 million shares were repurchased for a total value of
$73.8 million. Total shares outstanding as of December 31, 2015 was
101.0 million.
A total of $805.5 million remained on the outstanding share
repurchase authorization as of January 29, 2016. Since 2012 and
through January 29, 2016, approximately $1.5 billion had been
returned to shareholders through share repurchases and cash
dividends. On February 2, 2016, the Board of Directors declared a
cash dividend of $0.22 per share for first quarter 2016. The first
quarter 2016 dividend is payable on March 11, 2016 to shareholders
of record as of the close of trading on February 19, 2016.
Table 2: Fourth Quarter and Full-Year
2015 Results by Segment (unaudited)
Below is a summary of the segment results.
Index Analytics All Other
Operating Adjusted Adjusted Operating Adjusted Adjusted Operating
Adjusted Adjusted In thousands Revenues EBITDA EBITDA
Margin Revenues EBITDA EBITDA Margin Revenues
EBITDA EBITDA Margin QTD Q4'15 $ 143,702 $ 98,990 68.9% $
110,668 $ 30,908 27.9% $
18,523
($2,984)
-16.1%
QTD Q4'14 $ 129,463 $ 90,396 69.8% $ 105,424 $ 19,828 18.8% $
16,218
($5,919)
-36.5%
% change 11.0% 9.5% 5.0% 55.9%
14.2%
49.6% QTD Q3'15 $ 141,577 $ 102,927 72.7% $ 108,341 $ 29,216
27.0% $
18,853
($3,282)
-17.4%
% change 1.5% -3.8% 2.1% 5.8%
-1.8%
9.1%
FY 2015 $ 558,964
$ 392,987 70.3% $ 433,424 $ 95,468 22.0% $
82,625
($6,758)
-8.2%
FY 2014 $ 503,892 $ 349,685 69.4% $ 414,085 $ 72,173 17.4% $
78,703
($13,104)
-16.6%
% change 10.9% 12.4% 4.7% 32.3%
5.0%
48.4%
Index Segment:
Operating revenues for fourth quarter 2015 increased $14.2 million,
or 11.0%, to $143.7 million, compared to $129.5 million for fourth
quarter 2014. The $14.2 million increase was driven by an $8.9
million, or 10.7%, increase in recurring subscription revenues and
a $4.7 million, or 10.4%, increase in asset-based fees, as well as
a $0.6 million, or 42.3%, increase in non-recurring revenues. The
$8.9 million increase in recurring subscription revenues was driven
by strong growth in benchmark and data products broadly, with solid
growth in both market cap and factor, ESG and thematic products.
Adjusting for the impact of foreign currency exchange rate
fluctuations, recurring subscription revenues for fourth quarter
2015 would have increased 11.1%. The increase in asset-based fees
was driven primarily by an increase in revenues from ETFs, as well
as strong growth in revenues from non-ETF institutional passive
funds. Average AUM in ETFs linked to MSCI indexes increased $49.7
billion, or 13.3%, to $423.3 billion driven by cash inflows,
partially offset by market depreciation. The adjusted EBITDA margin
for Index was 68.9% in fourth quarter 2015, compared to 69.8% in
the prior year period and 72.7% in third quarter 2015. The decline
in the adjusted EBITDA margin compared to third quarter 2015 was
due to higher incentive compensation and severance as well as
higher professional fees associated with various technology and
corporate projects.
For full-year 2015, operating revenues increased $55.1 million,
or 10.9%, to $559.0 million, compared to $503.9 million for
full-year 2014. The $55.1 million increase was driven by a $33.0
million, or 10.3%, increase in recurring subscription revenues and
a $20.9 million, or 11.8%, increase in asset-based fees, as well as
a $1.2 million, or 17.7%, increase in non-recurring revenues. The
$33.0 million increase in recurring subscription revenues was
driven by solid growth in benchmark and data products broadly,
including solid growth in market cap products, combined with the
higher growth in factor, ESG and thematic products. Adjusting for
the impact of foreign currency exchange rate fluctuations,
recurring subscription revenues for full-year 2015 would have
increased 11.1%. The increase in asset-based fees was driven
primarily by an increase in revenues from ETFs, as well as strong
growth in revenues from non-ETF institutional passive funds and
exchange-traded futures and options linked to MSCI indexes. Average
AUM in ETFs linked to MSCI indexes increased $56.3 billion, or
15.5%, to $418.8 billion driven primarily by cash inflows,
partially offset by market depreciation. The adjusted EBITDA margin
for Index for full-year 2015 was 70.3%, compared to 69.4% in the
prior year period.
Total Index operating revenues represented 52.7% and 52.0% of
the total operating revenues in fourth quarter and full-year 2015,
respectively.
Index Run Rate at December 31, 2015 grew by $60.1 million, or
11.8%, to $569.9 million, compared to December 31, 2014. The $60.1
million increase was driven by a $33.6 million, or 10.0%, increase
in recurring subscription Run Rate and a $26.5 million, or 15.2%,
increase in asset-based fee Run Rate. For full-year 2015, there was
a negligible impact from foreign currency exchange rate
fluctuations on Index recurring subscription Run Rate.
Analytics Segment: Operating
revenues for fourth quarter 2015 increased $5.2 million, or 5.0%,
to $110.7 million, compared to $105.4 million in fourth quarter
2014. The increase was primarily driven by higher revenues from
RiskManager, equity models and InvestorForce products. Adjusting
for the impact of foreign currency exchange rate fluctuations,
Analytics operating revenues for fourth quarter 2015 would have
increased 5.7%. The adjusted EBITDA margin for Analytics was 27.9%,
compared to 18.8% in the prior year period and 27.0% in third
quarter 2015. The higher than anticipated fourth quarter 2015
margin was due to higher non-recurring sales and lower compensation
costs, offset in part by higher professional fees associated with
various technology and corporate projects.
For full-year 2015, operating revenues increased $19.3 million,
or 4.7%, to $433.4 million, compared to $414.1 million for
full-year 2014. The $19.3 million increase was primarily driven by
higher revenues from RiskManager, BarraOne and InvestorForce
products. Adjusting for the impact of foreign currency exchange
rate fluctuations, Analytics operating revenues for full-year 2015
would have increased 6.2%. The adjusted EBITDA margin for Analytics
was 22.0% for full-year 2015, compared to 17.4% in the prior
year.
Total Analytics operating revenues represented 40.6% and 40.3%
of the total operating revenues in fourth quarter and full-year
2015, respectively.
Analytics Run Rate at December 31, 2015 grew by $19.0 million,
or 4.5%, to $436.7 million, compared to December 31, 2014.
Adjusting for the impact of foreign currency exchange rate
fluctuations, Analytics Run Rate at December 31, 2015 would have
increased 6.0% compared to December 31, 2014.
With the consolidation of product lines within the Analytics
segment and the focus on solving client “use-cases,” the legacy
product lines, portfolio management analytics and risk management
analytics, no longer reflect how the Analytics segment is being
managed. As a result, we are no longer breaking out the results for
the segment in these two legacy product lines.
All Other Segment: Operating
revenues for fourth quarter 2015 increased $2.3 million, or 14.2%,
to $18.5 million, compared to $16.2 million in fourth quarter 2014.
The increase in All Other revenues was driven by a $1.3 million, or
14.9%, increase in ESG revenues to $9.9 million and a $1.0 million,
or 13.5%, increase in Real Estate revenues to $8.6 million.
Adjusting for the impact of foreign currency exchange rate
fluctuations, fourth quarter 2015 revenues for Real Estate would
have increased 20.1% and All Other operating revenues would have
increased 17.4%. The adjusted EBITDA margin for All Other was a
negative 16.1% for fourth quarter 2015, compared to a negative
36.5% in the prior year period. The improvement in margin was
primarily due to continued strong growth in ESG and improved
results in Real Estate.
For full-year 2015, operating revenues increased $3.9 million,
or 5.0%, to $82.6 million compared to $78.7 million for full-year
2014. The increase in All Other revenues was driven by a $9.3
million, or 32.9%, increase in ESG revenues to $37.6 million,
partially offset by a $5.4 million, or 10.7% decline in Real Estate
revenues. Adjusting for the impact of foreign currency exchange
rate fluctuations, full-year 2015 Real Estate revenues would have
increased 0.4% and All Other operating revenues would have
increased 12.2%. The adjusted EBITDA margin for All Other was a
negative 8.2% for full-year 2015, compared to a negative 16.6% in
the prior year. The increase in margin was primarily due to
continued strong growth in ESG and improved results in Real
Estate.
Total All Other operating revenues represented 6.8% and 7.7% of
the total operating revenues in fourth quarter and full-year 2015,
respectively.
All Other Run Rate at December 31, 2015 grew by $3.5 million, or
4.4%, to $82.7 million, compared to December 31, 2014. The $3.5
million increase was primarily driven by a $5.8 million increase in
ESG Run Rate to $40.3 million, partially offset by a $2.3 million,
or 5.2%, decline in Real Estate Run Rate to $42.4 million largely
due to foreign currency exchange rate fluctuations. Adjusting for
the impact of foreign currency exchange rate fluctuations, Real
Estate Run Rate at December 31, 2015 would have increased 1.9%, and
All Other Run Rate would have increased 9.6%, in each case,
compared to December 31, 2014.
Full-Year 2016 Guidance
MSCI’s guidance for full-year 2016 is as follows:
- Full-year 2016 adjusted EBITDA expenses
are expected to be in the range of $610 million to $625 million, or
approximately 4% higher than full-year 2015, using the mid-point of
the full-year 2016 guidance range.See Table 11 titled
“Reconciliation of Adjusted EBITDA Expenses to Operating Expenses
(unaudited)” and “Notes Regarding the Use of Non-GAAP Financial
Measures” below.
- Full-year 2016 interest expense,
including the amortization of financing fees, is expected to be
approximately $92 million.
- Full-year 2016 capex, which includes
capitalized software developments costs, is expected to be in the
range of $40 million to $50 million.See Table 12 titled
“Reconciliation of Free Cash Flow to Net Cash Provided by Operating
Activities (unaudited)” and “Notes Regarding the Use of Non-GAAP
Financial Measures” below.
- Full-year 2016 free cash flow is
expected to be in the range of $270 million to $310 million.See
Table 12 titled “Reconciliation of Free Cash Flow to Net Cash
Provided by Operating Activities (unaudited)” and “Notes Regarding
the Use of Non-GAAP Financial Measures” below.
- Full-year 2016 effective tax rate is
expected to be in the range of 33% to 34%.
Conference Call Information
MSCI Inc.'s senior management will review fourth quarter and
full-year 2015 results on Thursday, February 4, 2016 at 11:00 AM
Eastern Time. To listen to the live event, visit the events and
presentations section of MSCI's Investor Relations homepage,
http://ir.msci.com/events.cfm, or dial 1-877-312-9206 within the
United States. International callers dial 1-408-774-4001. This
press release and the related investor presentation used during the
conference call will be made available on MSCI's Investor Relations
homepage.
An audio recording of the conference call will be available on
MSCI’s Investor Relations homepage approximately two hours after
the conclusion of the live event and will be accessible through
February 7, 2016. To listen to the recording, visit
http://ir.msci.com/events.cfm, or dial 1-800-585-8367 (passcode:
26007658) within the United States. International callers dial
1-404-537-3406 (passcode: 26007658). A replay of the conference
call will be archived in the events and presentations section of
MSCI’s Investor Relations homepage for 12 months after the
call.
- Ends -
About MSCI
For more than 40 years, MSCI’s research-based indexes and
analytics have helped the world’s leading investors build and
manage better portfolios. Clients rely on our offerings for deeper
insights into the drivers of performance and risk in their
portfolios, broad asset class coverage and innovative research.
Our line of products and services includes indexes, analytical
models, data, real estate benchmarks and ESG research.
MSCI serves 97 of the top 100 largest money managers, according
to the most recent P&I ranking.
For more information, visit us at www.msci.com. MSCI#IR
Forward-Looking Statements
This earnings release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including without limitation, our full-year 2016 guidance.
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 our
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, 2014 filed with the Securities and Exchange Commission
(“SEC”) on February 27, 2015, as amended, and in quarterly reports
on Form 10-Q and current reports on Form 8-K filed or furnished
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 earnings 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 subscribe to the
notification service available through MSCI’s Investor Relations
homepage 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 non-GAAP financial measures presented in this
earnings release should not be considered as alternative measures
for the most directly comparable GAAP financial measures. The
non-GAAP financial measures presented in this earnings release are
used by management to monitor the financial performance of the
business, inform business decision making and forecast future
results.
“Adjusted EBITDA expenses” is defined as operating expenses,
less depreciation and amortization.
“Adjusted EBITDA” is defined as net income before income (loss)
from discontinued operations, net of income taxes, provision for
income taxes, other expense (income), net and depreciation and
amortization.
“Adjusted net income” and “adjusted EPS” are defined as net
income and EPS, respectively, before income from discontinued
operations, net of income taxes, the after-tax impact of the
amortization of intangible assets, the impact of debt repayment and
refinancing expenses and the impact from the gain on sale of
investment.
“Free cash flow” is defined as net cash provided by operating
activities, less capex. “Capex” is defined as capital expenditures
plus capitalized software development costs.
We believe that adjusting for 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. Additionally, we believe that adjusting
for income from discontinued operations, net of income tax,
provides investors with a meaningful trend of results for our
continuing operations. We believe that free cash flow is useful to
investors because it relates the operating cash flow of the Company
to the capital that is spent to continue and improve business
operations, such as investment in the Company’s existing
businesses. Further, free cash flow indicates our ability to
strengthen the Company’s balance sheet, repay our debt obligations,
pay cash dividends and repurchase shares of our common stock.
Finally, we believe that adjusting for one-time, unusual or
non-recurring expenses is useful to management and investors
because it allows for an evaluation of MSCI’s underlying operating
performance. 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 expenses, adjusted EBITDA, adjusted net income,
adjusted EPS and free cash flow are not defined in the same manner
by all companies and may not be comparable to similarly-titled
non-GAAP financial measures of other companies.
Notes Regarding Adjusting for the Impact of Foreign Currency
Exchange Rate Fluctuations
Foreign currency exchange rate fluctuations are calculated to be
the difference between the current period results as reported
compared to the current period results recalculated using the
foreign currency exchange rates in effect for the comparable prior
period.
Table 3: Condensed Consolidated Statements of Income
(unaudited)
Three Months Ended Year Ended Dec. 31,
Dec. 31, Sep. 30, Dec. 31, Dec. 31, In
thousands, except per share data 2015 2014 2015 2015 2014 Operating
revenues $ 272,893 $ 251,105 $ 268,771 $ 1,075,013 $ 996,680
Operating expenses Cost of revenues 64,804 69,839 65,593 267,695
276,623 Selling and marketing 39,809 40,805 38,809 162,294 163,839
Research and development 17,776 17,235 15,548 77,320 71,095 General
and administrative 23,590 18,921 19,960 86,007 76,369 Amortization
of intangible assets 11,803 11,591 11,710 46,910 45,877
Depreciation and amortization of property, equipment and leasehold
improvements 7,568 7,620 8,049
30,889 25,711 Total operating
expenses1 165,350 166,011
159,669 671,115 659,514
Operating income 107,543 85,094 109,102 403,898 337,166
Interest income (492 ) (226 ) (285 ) (1,166 ) (851 ) Interest
expense 22,896 15,791 17,267 62,387 31,820 Other expense (income)
(297 ) (1,199 ) (6,922 ) (6,877 )
(2,141 ) Other expenses (income), net 22,107
14,366 10,060 54,344
28,828 Income from continuing operations
before provision for income taxes 85,436 70,728 99,042 349,554
308,338 Provision for income taxes 25,437
27,459 34,644 119,516
109,396 Income from continuing operations
59,999 43,269 64,398
230,038 198,942 Income (loss) from
discontinued operations, net of income taxes (593 ) 1,071 - (6,390
) 85,171 Net Income $ 59,406
$ 44,340 $ 64,398 $ 223,648 $ 284,113
Earnings per basic common share from: Continuing
operations $ 0.59 $ 0.38 $ 0.59 $ 2.11 $ 1.72 Discontinued
operations (0.01 ) 0.01 -
(0.06 ) 0.73 Earnings per basic common share $ 0.58
$ 0.39 $ 0.59 $ 2.05 $ 2.45
Earnings per diluted common share from: Continuing
operations $ 0.58 $ 0.38 $ 0.59 $ 2.09 $ 1.70 Discontinued
operations (0.01 ) 0.01 -
(0.06 ) 0.73 Earnings per diluted common share $ 0.57
$ 0.39 $ 0.59 $ 2.03 $ 2.43
Weighted average shares outstanding used in computing
earnings per share: Basic 102,837
112,299 108,773 109,124
115,737 Diluted 103,590 113,289
109,440 109,926 116,706
1 Includes stock-based compensation expense of $7.8 million,
$6.6 million, and $3.4 million for the three months ended Dec. 31,
2015, Dec. 31, 2014, and Sep. 30, 2015, respectively. Includes
stock-based compensation expense of $27.5 million and $25.6 million
for the year ended Dec. 31, 2015 and Dec. 31, 2014, respectively.
Table 4: Selected Balance Sheet Items (unaudited)
As of Dec. 31, Sep. 30, Dec. 31,
In thousands 2015 2015 2014 Cash and cash equivalents $ 777,706 $
993,488 $ 508,799 Accounts receivable, net of allowances $ 208,239
$ 208,239 $ 178,717 Deferred revenue $ 317,552 $ 328,051 $
310,775 Long-term debt 1 $ 1,579,404 $ 1,578,849 $ 788,358 1
Consists of long-term debt of $1.6 billion, net of deferred
financing fees of $20.6 million, as of Dec. 31, 2015; long-term
debt of $1.6 billion, net of deferred financing fees of $21.2
million, as of Sep. 30, 2015; and long-term debt of $800 million,
net of deferred financing fees of $11.6 million, as of Dec. 31,
2014.
Table 5: Operating Results by Segment and Revenue Type
(unaudited)
Three Months Ended Dec. 31, 2015 Three Months Ended Dec.
31, 2014 Three Months Ended Sep. 30, 2015 All
Other All Other All Other In thousands
Index Analytics ESG Real Estate All
Other Total Consolidated Index Analytics
ESG Real Estate All Other Total
Consolidated Index Analytics ESG
Real Estate All Other Total Consolidated
Operating Revenues Recurring subscriptions $ 91,407 $ 107,855 $
9,760 $ 6,881 $ 16,641
$
215,903
$ 82,536 $ 104,064 $ 8,512 $ 5,976 $ 14,488
$
201,088
$ 89,139 $ 107,065 $ 9,513 $ 8,056 $ 17,569
$
213,773
Asset-based fees 50,198 - - - -
50,198 45,453 - - -
-
45,453 50,736 - - - -
50,736 Non-recurring
2,097 2,813 129 1,753
1,882
6,792
1,474 1,360 96
1,634 1,730
4,564
1,702 1,276 174
1,110 1,284
4,262
Total revenues $ 143,702 $ 110,668 $ 9,889
$ 8,634 $ 18,523
$
272,893
$ 129,463 $ 105,424 $ 8,608 $ 7,610
$ 16,218
$
251,105
$ 141,577 $ 108,341 $ 9,687 $ 9,166 $ 18,853
$
268,771
Adjusted EBITDA $ 98,990 $ 30,908 $ (2,984 )
$
126,914 $ 90,396 $ 19,828 $ (5,919 )
$ 104,305
$ 102,927 $ 29,216 $ (3,282 )
$ 128,861 Adjusted
EBITDA margin (%) 68.9 % 27.9 % (16.1 %)
46.5
% 69.8 % 18.8 % (36.5 %)
41.5
% 72.7 % 27.0 % (17.4 %)
47.9
% Operating margin (%)
39.4 % 33.9
% 40.6 % Year Ended
Dec. 31, 2015 Year Ended Dec. 31, 2014 All
Other All Other
In thousands
Index Analytics ESG Real Estate All
Other Total Consolidated Index Analytics
ESG Real Estate All Other Total
Consolidated
Operating Revenues
Recurring subscriptions $ 353,136 $ 426,726 $ 37,174 $ 40,492 $
77,666
$
857,528
$ 320,113 $ 409,766 $ 27,875 $ 43,429 $ 71,304
$
801,183
Asset-based fees 197,974 - - - -
197,974 177,105 - - - -
177,105 Non-recurring 7,854 6,698
437 4,522 4,959
19,511
6,674 4,319 419
6,980 7,399
18,392
Total revenues $ 558,964 $ 433,424 $ 37,611
$ 45,014 $ 82,625
$
1,075,013
$ 503,892 $ 414,085 $ 28,294 $ 50,409
$ 78,703
$
996,680
Adjusted EBITDA
$ 392,987 $ 95,468 $ (6,758 )
$ 481,697 $ 349,685 $
72,173 $ (13,104 )
$ 408,754
Adjusted EBITDA margin (%)
70.3 % 22.0 % (8.2 %)
44.8
% 69.4 % 17.4 % (16.6 %)
41.0
%
Operating margin (%)
37.6 % 33.8 %
Table 6: ETF Assets Linked to MSCI Indexes (unaudited)
1
Three Months Ended Year
Ended In billions Dec. 2015 Sep. 2015 Jun. 2015 Mar.
2015 Dec. 2014 Dec. 2015 Dec. 2014 Beginning Period AUM in
ETFs linked to MSCI Indexes $ 390.2 $ 435.4 $ 418.0 $ 373.3 $ 377.9
$ 373.3 $ 332.9 Market Appreciation/(Depreciation) 14.5 (48.2 )
(6.9 ) 13.0 (8.3 ) (27.6 ) (9.0 ) Cash Inflow/(Outflow) 28.7
3.0 24.3 31.7 3.7
87.7 49.4 Period End AUM in ETFs linked
to MSCI Indexes $ 433.4 $ 390.2 $ 435.4 $ 418.0 $ 373.3 $ 433.4 $
373.3 Period Average AUM in ETFs linked to MSCI Indexes $
423.3 $ 418.2 $ 441.4 $ 392.5 $ 373.6 $ 418.8 $ 362.5 Avg.
Basis Point Fee2 3.32 3.40 3.43 3.38 3.39 3.32 3.39 Source:
Bloomberg and MSCI
1 ETF assets under management calculation
methodology is ETF net asset value multiplied by shares
outstanding.
2 Based on period-end Run Rate.
Table 7: Run Rate by Segment and Type (unaudited)
As of % Change
from Dec. 31, Dec. 31, Sep. 30, Dec. 31, Sep. 30, In thousands 2015
2014 2015 2014 2015
Index Recurring subscriptions $ 368,855
$ 335,277 $ 361,209 10.0 % 2.1 % Asset-based fees 201,047
174,558 187,818 15.2 % 7.0 % Total Index Run Rate1 $
569,902 $ 509,835 $ 549,027 11.8 % 3.8 %
Analytics1 $ 436,671 $ 417,677 $ 430,377 4.5 % 1.5 %
All Other1 ESG - recurring subscriptions $
40,291 $ 34,482 $ 38,850 16.8 % 3.7 % Real Estate - recurring
subscriptions 42,386 44,731 44,027 (5.2 %)
(3.7 %) Total All Other Run Rate1 $ 82,677 $ 79,213 $ 82,877 4.4 %
(0.2 %)
Consolidated Total recurring subscription Run
Rate $ 888,203 $ 832,167 $ 874,463 6.7 % 1.6 % Total asset-based
fees Run Rate 201,047 174,558 187,818 15.2 %
7.0 % Total Run Rate1 $ 1,089,250 $ 1,006,725 $ 1,062,281 8.2 % 2.5
%
1 The Run Rate at a particular point in
time primarily represents the forward-looking revenues for the next
12 months from all subscriptions and investment product licenses we
then 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, for ETF fees,
the market value on the last trading day of the period, and for
non-ETF funds and futures and options, the most recent periodic fee
earned under such license or subscription. 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 8: Sales and Aggregate Retention Rate by Segment
(unaudited)
Three Months Ended Year Ended In thousands Dec. 2015 Sep. 2015 Jun.
2015 Mar. 2015 Dec. 2014 Dec. 2015 Dec. 2014
Index New
recurring subscription sales $ 13,702 $ 11,810 $ 12,459 $ 11,550 $
12,938 $ 49,521 $ 44,547 Subscription cancellations (6,147 )
(3,852 ) (3,871 ) (2,384 ) (3,665 )
(16,254 ) (14,310 ) Net new recurring subscription
sales $ 7,555 $ 7,958 $ 8,588 $ 9,166 $
9,273 $ 33,267 $ 30,237 Non-recurring sales $
2,779 $ 1,719 $ 2,137 $ 2,329 $ 2,217
$ 8,964 $ 8,956 Total Index net sales $ 10,334
$ 9,677 $ 10,725 $ 11,495 $ 11,490
$ 42,231 $ 39,193 Index Aggregate
Retention Rate1 92.7 % 95.4 % 95.4 % 97.2 % 95.2 % 95.2 % 95.3 %
Analytics New recurring subscription sales $ 16,481 $
10,390 $ 12,438 $ 13,510 $ 14,019 $ 52,819 $ 55,588 Subscription
cancellations (10,593 ) (4,898 ) (6,447 )
(7,424 ) (10,390 ) (29,362 ) (33,172 )
Net new recurring subscription sales $ 5,888 $ 5,492
$ 5,991 $ 6,086 $ 3,629 $ 23,457 $
22,416 Non-recurring sales $ 2,490 $ 1,381 $
2,239 $ 1,176 $ 1,421 $ 7,286 $ 4,837
Total Analytics net sales $ 8,378 $ 6,873 $
8,230 $ 7,262 $ 5,050 $ 30,743 $ 27,253
Analytics Aggregate Retention Rate1 89.9 % 95.3 %
93.8 % 92.9 % 89.7 % 93.0 % 91.8 %
All Other ESG New
recurring subscription sales $ 2,771 $ 2,549 $ 2,043 $ 2,193 $
2,260 $ 9,556 $ 6,927 Subscription cancellations (1,072 )
(716 ) (531 ) (514 ) (917 )
(2,833 ) (1,806 ) Net new recurring subscription sales $
1,699 $ 1,833 $ 1,512 $ 1,679 $ 1,343
$ 6,723 $ 5,121 Non-recurring sales $ 341
$ 146 $ 53 $ 122 $ 67 $ 662
$ 490 Total ESG net sales $ 2,040 $ 1,979
$ 1,565 $ 1,801 $ 1,410 $ 7,385
$ 5,611 Real Estate New recurring subscription sales
$ 1,435 $ 759 $ 2,635 $ 2,272 $ 2,715 $ 7,101 $ 10,581 Subscription
cancellations (2,111 ) (1,449 ) (1,321 )
(1,328 ) (2,052 ) (6,209 ) (5,367 ) Net
new recurring subscription sales $ (676 ) $ (690 ) $ 1,314 $
944 $ 663 $ 892 $ 5,214 Non-recurring
sales $ 1,251 $ 908 $ 1,271 $ 788 $
1,371 $ 4,218 $ 5,887 Total Real Estate net
sales $ 575 $ 218 $ 2,585 $ 1,732 $
2,034 $ 5,110 $ 11,101 All Other New
recurring subscription sales $ 4,206 $ 3,308 $ 4,678 $ 4,465 $
4,975 $ 16,657 $ 17,508 Subscription cancellations (3,183 )
(2,165 ) (1,852 ) (1,842 ) (2,969 )
(9,042 ) (7,173 ) Net new recurring subscription
sales $ 1,023 $ 1,143 $ 2,826 $ 2,623 $
2,006 $ 7,615 $ 10,335 Non-recurring sales $
1,592 $ 1,054 $ 1,324 $ 910 $ 1,438
$ 4,880 $ 6,377 Total All Other net sales $
2,615 $ 2,197 $ 4,150 $ 3,533 $ 3,444
$ 12,495 $ 16,712 All Other Aggregate
Retention Rate1 83.9 % 89.1 % 90.7 % 90.7 % 83.9 % 88.6 % 89.5 %
Consolidated New recurring subscription sales $
34,389 $ 25,508 $ 29,575 $ 29,525 $ 31,932 $ 118,997 $ 117,643
Subscription cancellations (19,923 ) (10,915 )
(12,170 ) (11,650 ) (17,024 ) (54,658 )
(54,655 ) Net new recurring subscription sales $ 14,466 $
14,593 $ 17,405 $ 17,875 $ 14,908 $
64,339 $ 62,988 Non-recurring sales $ 6,861 $
4,154 $ 5,700 $ 4,415 $ 5,076 $ 21,130
$ 20,170 Total net sales $ 21,327 $ 18,747
$ 23,105 $ 22,290 $ 19,984 $ 85,469
$ 83,158 Total Aggregate Retention Rate1 90.4
% 94.8 % 94.2 % 94.4 % 91.3 % 93.4 % 93.0 %
1 The Aggregate Retention Rates for a
period are calculated by annualizing the cancellations for which we
have received a notice of termination or for which we believe there
is an intention to not renew during the period and we believe that
such notice or intention evidences the client’s final decision to
terminate or not renew the applicable 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 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.
Table 9: Reconciliation of Adjusted EBITDA to Net Income
(unaudited)
Three Months Ended
Year Ended Dec. 31, Dec. 31, Sep. 30, Dec. 31, Dec. 31, In
thousands 2015 2014 2015 2015 2014 Index adjusted EBITDA $ 98,990 $
90,396 $ 102,927 $ 392,987 $ 349,685 Analytics adjusted EBITDA
30,908 19,828 29,216 95,468 72,173 All Other adjusted EBITDA
(2,984 ) (5,919 ) (3,282 ) (6,758 )
(13,104 )
Consolidated adjusted EBITDA 126,914
104,305 128,861
481,697 408,754
Amortization of intangible assets 11,803 11,591 11,710 46,910
45,877 Depreciation and amortization of property, equipment and
leasehold improvements 7,568 7,620
8,049 30,889 25,711
Operating income 107,543 85,094 109,102
403,898 337,166 Other expense (income), net 22,107
14,366 10,060 54,344 28,828 Provision for income taxes
25,437 27,459 34,644
119,516 109,396
Income from continuing
operations 59,999 43,269 64,398
230,038 198,942 Income (loss) from discontinued
operations, net of income taxes (593 ) 1,071
- (6,390 ) 85,171
Net
income $ 59,406 $ 44,340
$ 64,398 $ 223,648
$ 284,113
Table 10: Reconciliation of Adjusted Net Income and Adjusted
EPS to Net Income and EPS (unaudited)
Three Months Ended Year
Ended Dec. 31, Dec. 31, Sep. 30, Dec. 31, Dec. 31, In
thousands, except per share data 2015 2014 2015 2015 2014 Net
Income $ 59,406 $ 44,340 $ 64,398 $ 223,648 $ 284,113
Less:Income (loss) from discontinued operations, net of income
taxes (593 ) 1,071 -
(6,390 ) 85,171 Income from continuing
operations 59,999 43,269 64,398 230,038 198,942 Plus:Amortization
of intangible assets 11,803 11,591 11,710 46,910 45,877 Plus:Debt
repayment and refinancing expenses - 7,944 - - 7,944 Less:Gain on
sale of investment - - (6,300 ) (6,300 ) - Less:Income tax effect
(3,534 ) (7,273 ) (4,082 ) (16,039 )
(19,096 )
Adjusted Net Income $ 68,268
$ 55,531 $ 65,726
$ 254,609 $ 233,667
Diluted EPS $ 0.57 $ 0.39 $ 0.59 $ 2.03 $ 2.43
Less:Earnings per diluted common share from discontinued operations
(0.01 ) 0.01 - (0.06 )
0.73 Earnings per diluted common share from
continuing operations 0.58 0.38 0.59 2.09 1.70 Plus:Amortization of
intangible assets 0.11 0.10 0.11 0.43 0.39 Plus:Debt repayment and
refinancing expenses - 0.07 - - 0.07 Less:Gain on sale of
investment - - (0.06 ) (0.06 ) - Less:Income tax effect
(0.03 ) (0.06 ) (0.04 ) (0.14 ) (0.16 )
Adjusted EPS $ 0.66 $
0.49 $ 0.60 $ 2.32
$ 2.00
Table 11: Reconciliation of Adjusted EBITDA Expenses to
Operating Expenses (unaudited)
Three
Months Ended Year Ended Full Year Dec. 31, Dec. 31, Sep. 30, Dec.
31, Dec. 31, 2016 In thousands 2015 2014 2015 2015 2014 Outlook
Index adjusted EBITDA expenses $ 44,712 $ 39,067 $ 38,650 $ 165,977
$ 154,207 Analytics adjusted EBITDA expenses 79,760 85,596 79,125
337,956 341,912 All Other adjusted EBITDA expenses 21,507
22,137 22,135 89,383 91,807
Consolidated adjusted EBITDA expenses 145,979
146,800 139,910 593,316
587,926 $610,000 - $625,000 Amortization of
intangible assets 11,803 11,591 11,710 46,910 45,877
Depreciation and amortization of property,
80,000 to 82,000
equipment and leasehold improvements 7,568 7,620
8,049 30,889 25,711
Total operating
expenses $ 165,350 $ 166,011
$ 159,669 $ 671,115 $
659,514 $690,000 - $707,000
Table 12: Reconciliation of Free Cash Flow to Net Cash
Provided by Operating Activities (unaudited)
Three Months Ended Year Ended
Full Year Dec. 31, Dec. 31, Sep. 30, Dec. 31,
Dec. 31, 2016 In thousands 2015 2014 2015 2015 2014 Outlook Net
cash provided by operating activities $ 81,322 $ 104,054 $ 133,963
$ 305,994 $ 305,673 $320,000 - $ 350,000 Capital
expenditures (16,127 ) (6,485 ) (8,975 ) (40,652 ) (42,659 )
Capitalized software development costs (2,438 )
(2,153 ) (3,275 ) (8,500 ) (8,216 )
Capex (18,565 ) (8,638 ) (12,250 ) (49,152 ) (50,875 ) (50,000 -
40,000)
Free cash
flow $ 62,757 $ 95,416
$ 121,713 $ 256,842
$ 254,798 $270,000 - $ 310,000
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MSCI Inc.New YorkMSCIStephen Davidson, + 1
212-981-1090orMedia InquiriesNew YorkMSCIKristin
Meza, + 1 212-804-5330orLondonMSCIPaul Griffin, + 44 20 7618
2594orMHP CommunicationsSally Todd | Christian Pickel, + 44 20 3128
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