UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
February 4, 2016
MSCI
Inc.
(Exact
name of registrant as specified in its charter)
Delaware
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001-33812
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13-4038723
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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7
World Trade Center, 250 Greenwich St, 49th
Floor, New York, NY 10007
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(Address
of principal executive offices)
(Zip Code)
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(212)
804-3900
(Registrant’s
telephone number, including area code)
NOT
APPLICABLE
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2. below):
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On February 4, 2016, MSCI Inc. (the “Registrant”) released financial
information with respect to its fourth quarter and full year ended
December 31, 2015. A copy of the press release containing this
information is furnished as Exhibit 99.1 to this Current Report on Form
8-K (this “Report”).
The Registrant’s press release contains certain non-GAAP financial
measures. Reconciliations of these non-GAAP financial measures to the
comparable GAAP financial measures are also contained in Exhibit 99.1.
The information furnished under Item 2.02 of this Report, including
Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or
otherwise subject to the liabilities of that section, nor shall it be
deemed incorporated by reference into any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.
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Description
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Exhibit 99.1
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Press Release of the Registrant, dated February 4, 2016, containing
financial information for the fourth quarter and full year ended
December 31, 2015.
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SIGNATURE
Pursuant to
the requirements of the Exchange Act, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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MSCI Inc.
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Date: February 4, 2016
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By:
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/s/ Henry A. Fernandez
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Name:
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Henry A. Fernandez
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Title:
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Chief Executive Officer, President and Chairman
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Exhibit Index
Exhibit No.
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Description
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99.1
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Press Release of the Registrant, dated February 4, 2016,
containing financial information for the fourth quarter and full
year ended December 31, 2015.
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Exhibit 99.1
MSCI
Reports Financial Results for Fourth Quarter and Full-Year 2015
NEW YORK--(BUSINESS WIRE)--February 4, 2016--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.)
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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.
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21.7% increase in adjusted EBITDA and an approximate 500 basis
point increase in adjusted EBITDA margin.
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34.7% increase in adjusted EPS to $0.66, which includes $0.04 per
share net tax benefit.
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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.
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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.
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$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 $760
million to our shareholders and reduced the outstanding share count by
10%. Our rigorous execution in these areas resulted in a significant
increase in profitability and earnings for MSCI.”
Mr. Fernandez added, “Based on our accomplishments in 2015 and, more
importantly, the opportunities before us, we have multiple levers that
we believe will drive our future growth and profitability.”
Table 1: Selected Consolidated Financial and Operating Information
(unaudited)
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Three Months Ended
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% Change from
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Year Ended
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Dec. 31,
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Dec. 31,
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Sep. 30,
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Dec. 31,
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Sep. 30,
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Dec. 31,
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Dec. 31,
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$ in thousands, except per share and share data
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2015
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2014
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2015
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2014
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2015
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2015
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2014
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% Change
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Operating revenues
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$
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272,893
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$
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251,105
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$
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268,771
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8.7
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%
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1.5
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%
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$
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1,075,013
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$
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996,680
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7.9
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%
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Operating income
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$
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107,543
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$
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85,094
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$
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109,102
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26.4
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%
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(1.4
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%)
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$
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403,898
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$
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337,166
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19.8
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%
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% operating margin
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39.4
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%
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33.9
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%
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40.6
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%
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37.6
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%
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33.8
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%
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Income from continuing operations
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$
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59,999
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$
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43,269
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$
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64,398
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38.7
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%
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(6.8
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%)
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$
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230,038
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$
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198,942
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15.6
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%
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Net Income
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$
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59,406
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$
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44,340
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$
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64,398
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34.0
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%
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(7.8
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%)
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$
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223,648
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$
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284,113
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(21.3
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%)
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Diluted EPS from continuing operations
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$
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0.58
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$
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0.38
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$
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0.59
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52.6
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%
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(1.7
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%)
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$
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2.09
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$
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1.70
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22.9
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%
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Diluted EPS
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$
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0.57
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$
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0.39
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$
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0.59
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46.2
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%
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(3.4
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%)
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$
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2.03
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$
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2.43
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(16.5
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%)
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Diluted weighted average common shares outstanding
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103,590
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113,289
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109,440
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(8.6
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%)
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(5.3
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%)
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109,926
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116,706
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(5.8
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%)
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Adjusted net income1
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$
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68,268
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$
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55,531
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$
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65,726
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22.9
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%
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3.9
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%
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$
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254,609
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$
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233,667
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9.0
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%
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Adjusted EPS1
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$
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0.66
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$
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0.49
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$
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0.60
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34.7
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%
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10.0
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%
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$
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2.32
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$
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2.00
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16.0
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%
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Adjusted EBITDA2
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$
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126,914
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$
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104,305
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$
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128,861
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21.7
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%
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(1.5
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%)
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$
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481,697
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$
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408,754
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17.8
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%
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Adjusted EBITDA margin
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46.5
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%
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41.5
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%
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47.9
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%
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44.8
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%
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41.0
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%
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Net cash provided by operating activities
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$
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81,322
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$
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104,054
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$
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133,963
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(21.8
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%)
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(39.3
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%)
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$
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305,994
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$
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305,673
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0.1
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%
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Free cash flow3
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$
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62,757
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$
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95,416
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$
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121,713
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(34.2
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%)
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(48.4
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%)
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$
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256,842
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$
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254,798
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0.8
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%
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Employees, at period end
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2,754
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2,926
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2,743
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(5.9
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%)
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0.4
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%
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% Employees by location
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Developed Market Centers
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47
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%
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49
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%
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48
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%
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Emerging Market Centers
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53
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%
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51
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%
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52
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%
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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."
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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."
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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."
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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.
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Index
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Analytics
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All Other
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|
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Operating
|
|
Adjusted
|
|
Adjusted
|
|
Operating
|
|
Adjusted
|
|
Adjusted
|
|
Operating
|
|
Adjusted
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|
Adjusted
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In thousands
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|
|
|
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
|
CONTACT:
MSCI Inc.
New York
MSCI
Stephen
Davidson, + 1 212-981-1090
or
Media Inquiries
New York
MSCI
Kristin
Meza, + 1 212-804-5330
or
London
MSCI
Paul Griffin, +
44 20 7618 2594
or
MHP Communications
Sally Todd | Christian
Pickel, + 44 20 3128 8754
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