msci-10q_20190630.htm
false 2019 Q2 MSCI Inc. 0001408198 --12-31 Large Accelerated Filer false true true P1Y P1Y us-gaap:OtherAccruedLiabilitiesCurrent P9Y11M15D 0001408198 2019-01-01 2019-06-30 xbrli:shares 0001408198 2019-07-26 iso4217:USD 0001408198 2019-06-30 0001408198 2018-12-31 iso4217:USD xbrli:shares 0001408198 2019-04-01 2019-06-30 0001408198 2018-04-01 2018-06-30 0001408198 2018-01-01 2018-06-30 0001408198 us-gaap:CommonStockMember 2018-12-31 0001408198 us-gaap:TreasuryStockMember 2018-12-31 0001408198 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001408198 us-gaap:RetainedEarningsMember 2018-12-31 0001408198 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001408198 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001408198 2019-01-01 2019-03-31 0001408198 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001408198 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001408198 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001408198 us-gaap:TreasuryStockMember 2019-01-01 2019-03-31 0001408198 us-gaap:CommonStockMember 2019-03-31 0001408198 us-gaap:TreasuryStockMember 2019-03-31 0001408198 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001408198 us-gaap:RetainedEarningsMember 2019-03-31 0001408198 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001408198 2019-03-31 0001408198 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001408198 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001408198 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001408198 us-gaap:TreasuryStockMember 2019-04-01 2019-06-30 0001408198 us-gaap:CommonStockMember 2019-06-30 0001408198 us-gaap:TreasuryStockMember 2019-06-30 0001408198 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001408198 us-gaap:RetainedEarningsMember 2019-06-30 0001408198 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001408198 us-gaap:CommonStockMember 2017-12-31 0001408198 us-gaap:TreasuryStockMember 2017-12-31 0001408198 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0001408198 us-gaap:RetainedEarningsMember 2017-12-31 0001408198 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0001408198 2017-12-31 0001408198 us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0001408198 2018-01-01 2018-03-31 0001408198 us-gaap:RetainedEarningsMember us-gaap:AccountingStandardsUpdate201409Member 2018-01-01 2018-03-31 0001408198 us-gaap:AccountingStandardsUpdate201409Member 2018-01-01 2018-03-31 0001408198 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-03-31 0001408198 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0001408198 us-gaap:CommonStockMember 2018-01-01 2018-03-31 0001408198 us-gaap:TreasuryStockMember 2018-01-01 2018-03-31 0001408198 us-gaap:CommonStockMember 2018-03-31 0001408198 us-gaap:TreasuryStockMember 2018-03-31 0001408198 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0001408198 us-gaap:RetainedEarningsMember 2018-03-31 0001408198 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0001408198 2018-03-31 0001408198 us-gaap:RetainedEarningsMember 2018-04-01 2018-06-30 0001408198 us-gaap:AdditionalPaidInCapitalMember 2018-04-01 2018-06-30 0001408198 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0001408198 us-gaap:TreasuryStockMember 2018-04-01 2018-06-30 0001408198 us-gaap:CommonStockMember 2018-06-30 0001408198 us-gaap:TreasuryStockMember 2018-06-30 0001408198 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0001408198 us-gaap:RetainedEarningsMember 2018-06-30 0001408198 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0001408198 2018-06-30 xbrli:pure 0001408198 msci:BlackrockIncMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueProductLineMember 2019-01-01 2019-06-30 0001408198 msci:BlackrockIncMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueProductLineMember 2018-01-01 2018-06-30 0001408198 msci:BlackrockIncMember msci:IndexMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueProductLineMember 2019-01-01 2019-06-30 0001408198 msci:BlackrockIncMember msci:IndexMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueProductLineMember 2018-01-01 2018-06-30 msci:Customer 0001408198 msci:AnalyticsMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueProductLineMember 2019-01-01 2019-06-30 0001408198 msci:AnalyticsMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueProductLineMember 2018-01-01 2018-06-30 0001408198 us-gaap:AllOtherSegmentsMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueProductLineMember 2019-01-01 2019-06-30 0001408198 us-gaap:AllOtherSegmentsMember us-gaap:CustomerConcentrationRiskMember us-gaap:SalesRevenueProductLineMember 2018-01-01 2018-06-30 0001408198 msci:RecurringSubscriptionsMember msci:IndexMember 2019-04-01 2019-06-30 0001408198 msci:RecurringSubscriptionsMember msci:AnalyticsMember 2019-04-01 2019-06-30 0001408198 msci:RecurringSubscriptionsMember us-gaap:AllOtherSegmentsMember 2019-04-01 2019-06-30 0001408198 msci:RecurringSubscriptionsMember 2019-04-01 2019-06-30 0001408198 msci:AssetBasedFeesMember msci:IndexMember 2019-04-01 2019-06-30 0001408198 msci:AssetBasedFeesMember 2019-04-01 2019-06-30 0001408198 msci:NonRecurringMember msci:IndexMember 2019-04-01 2019-06-30 0001408198 msci:NonRecurringMember msci:AnalyticsMember 2019-04-01 2019-06-30 0001408198 msci:NonRecurringMember us-gaap:AllOtherSegmentsMember 2019-04-01 2019-06-30 0001408198 msci:NonRecurringMember 2019-04-01 2019-06-30 0001408198 msci:IndexMember 2019-04-01 2019-06-30 0001408198 msci:AnalyticsMember 2019-04-01 2019-06-30 0001408198 us-gaap:AllOtherSegmentsMember 2019-04-01 2019-06-30 0001408198 msci:RecurringSubscriptionsMember msci:IndexMember 2019-01-01 2019-06-30 0001408198 msci:RecurringSubscriptionsMember msci:AnalyticsMember 2019-01-01 2019-06-30 0001408198 msci:RecurringSubscriptionsMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-06-30 0001408198 msci:RecurringSubscriptionsMember 2019-01-01 2019-06-30 0001408198 msci:AssetBasedFeesMember msci:IndexMember 2019-01-01 2019-06-30 0001408198 msci:AssetBasedFeesMember 2019-01-01 2019-06-30 0001408198 msci:NonRecurringMember msci:IndexMember 2019-01-01 2019-06-30 0001408198 msci:NonRecurringMember msci:AnalyticsMember 2019-01-01 2019-06-30 0001408198 msci:NonRecurringMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-06-30 0001408198 msci:NonRecurringMember 2019-01-01 2019-06-30 0001408198 msci:IndexMember 2019-01-01 2019-06-30 0001408198 msci:AnalyticsMember 2019-01-01 2019-06-30 0001408198 us-gaap:AllOtherSegmentsMember 2019-01-01 2019-06-30 0001408198 msci:RecurringSubscriptionsMember msci:IndexMember 2018-04-01 2018-06-30 0001408198 msci:RecurringSubscriptionsMember msci:AnalyticsMember 2018-04-01 2018-06-30 0001408198 msci:RecurringSubscriptionsMember us-gaap:AllOtherSegmentsMember 2018-04-01 2018-06-30 0001408198 msci:RecurringSubscriptionsMember 2018-04-01 2018-06-30 0001408198 msci:AssetBasedFeesMember msci:IndexMember 2018-04-01 2018-06-30 0001408198 msci:AssetBasedFeesMember 2018-04-01 2018-06-30 0001408198 msci:NonRecurringMember msci:IndexMember 2018-04-01 2018-06-30 0001408198 msci:NonRecurringMember msci:AnalyticsMember 2018-04-01 2018-06-30 0001408198 msci:NonRecurringMember us-gaap:AllOtherSegmentsMember 2018-04-01 2018-06-30 0001408198 msci:NonRecurringMember 2018-04-01 2018-06-30 0001408198 msci:IndexMember 2018-04-01 2018-06-30 0001408198 msci:AnalyticsMember 2018-04-01 2018-06-30 0001408198 us-gaap:AllOtherSegmentsMember 2018-04-01 2018-06-30 0001408198 msci:RecurringSubscriptionsMember msci:IndexMember 2018-01-01 2018-06-30 0001408198 msci:RecurringSubscriptionsMember msci:AnalyticsMember 2018-01-01 2018-06-30 0001408198 msci:RecurringSubscriptionsMember us-gaap:AllOtherSegmentsMember 2018-01-01 2018-06-30 0001408198 msci:RecurringSubscriptionsMember 2018-01-01 2018-06-30 0001408198 msci:AssetBasedFeesMember msci:IndexMember 2018-01-01 2018-06-30 0001408198 msci:AssetBasedFeesMember 2018-01-01 2018-06-30 0001408198 msci:NonRecurringMember msci:IndexMember 2018-01-01 2018-06-30 0001408198 msci:NonRecurringMember msci:AnalyticsMember 2018-01-01 2018-06-30 0001408198 msci:NonRecurringMember us-gaap:AllOtherSegmentsMember 2018-01-01 2018-06-30 0001408198 msci:NonRecurringMember 2018-01-01 2018-06-30 0001408198 msci:IndexMember 2018-01-01 2018-06-30 0001408198 msci:AnalyticsMember 2018-01-01 2018-06-30 0001408198 us-gaap:AllOtherSegmentsMember 2018-01-01 2018-06-30 0001408198 2019-07-01 2019-06-30 0001408198 2020-07-01 2019-06-30 0001408198 2021-07-01 2019-06-30 0001408198 2022-07-01 2019-06-30 0001408198 msci:IndexMember 2018-12-31 0001408198 msci:AnalyticsMember 2018-12-31 0001408198 us-gaap:AllOtherSegmentsMember 2018-12-31 0001408198 msci:IndexMember 2019-06-30 0001408198 msci:AnalyticsMember 2019-06-30 0001408198 us-gaap:AllOtherSegmentsMember 2019-06-30 0001408198 msci:AcquiredIntangibleAssetsMember 2019-04-01 2019-06-30 0001408198 msci:AcquiredIntangibleAssetsMember 2018-04-01 2018-06-30 0001408198 msci:AcquiredIntangibleAssetsMember 2019-01-01 2019-06-30 0001408198 msci:AcquiredIntangibleAssetsMember 2018-01-01 2018-06-30 0001408198 us-gaap:SoftwareDevelopmentMember 2019-04-01 2019-06-30 0001408198 us-gaap:SoftwareDevelopmentMember 2018-04-01 2018-06-30 0001408198 us-gaap:SoftwareDevelopmentMember 2019-01-01 2019-06-30 0001408198 us-gaap:SoftwareDevelopmentMember 2018-01-01 2018-06-30 0001408198 us-gaap:CustomerRelationshipsMember 2019-06-30 0001408198 us-gaap:CustomerRelationshipsMember 2018-12-31 0001408198 us-gaap:TrademarksAndTradeNamesMember 2019-06-30 0001408198 us-gaap:TrademarksAndTradeNamesMember 2018-12-31 0001408198 msci:TechnologyOrSoftwareMember 2019-06-30 0001408198 msci:TechnologyOrSoftwareMember 2018-12-31 0001408198 msci:ProprietaryDatabasesAndSystemsMember 2019-06-30 0001408198 msci:ProprietaryDatabasesAndSystemsMember 2018-12-31 0001408198 us-gaap:SeniorNotesMember 2019-06-30 0001408198 msci:FivePointTwoFivePercentSeniorUnsecuredNotesDueTwoThousandTwentyFourMember 2019-01-01 2019-06-30 0001408198 msci:FivePointSevenFivePercentSeniorUnsecuredNotesDueTwoThousandTwentyFiveMember 2019-01-01 2019-06-30 0001408198 msci:FourPointSevenFivePercentSeniorUnsecuredNotesDueTwoThousandTwentySixMember 2019-01-01 2019-06-30 0001408198 msci:FivePointThreeSevenFivePercentSeniorUnsecuredNotesDueTwoThousandTwentySevenMember 2019-01-01 2019-06-30 0001408198 msci:FivePointTwoFivePercentSeniorUnsecuredNotesDueTwoThousandTwentyFourMember 2019-06-30 0001408198 msci:FivePointSevenFivePercentSeniorUnsecuredNotesDueTwoThousandTwentyFiveMember 2019-06-30 0001408198 msci:FourPointSevenFivePercentSeniorUnsecuredNotesDueTwoThousandTwentySixMember 2019-06-30 0001408198 msci:FivePointThreeSevenFivePercentSeniorUnsecuredNotesDueTwoThousandTwentySevenMember 2019-06-30 0001408198 msci:FivePointTwoFivePercentSeniorUnsecuredNotesDueTwoThousandTwentyFourMember 2018-12-31 0001408198 msci:FivePointSevenFivePercentSeniorUnsecuredNotesDueTwoThousandTwentyFiveMember 2018-12-31 0001408198 msci:FourPointSevenFivePercentSeniorUnsecuredNotesDueTwoThousandTwentySixMember 2018-12-31 0001408198 msci:FivePointThreeSevenFivePercentSeniorUnsecuredNotesDueTwoThousandTwentySevenMember 2018-12-31 0001408198 msci:RevolvingCreditAgreementMember 2014-11-20 0001408198 msci:RevolvingCreditAgreementMember 2019-01-01 2019-06-30 0001408198 msci:RevolvingCreditAgreementMember 2016-08-04 0001408198 msci:RevolvingCreditAgreementMember 2018-05-15 0001408198 msci:RevolvingCreditAgreementMember 2016-08-03 2016-08-04 0001408198 msci:RevolvingCreditAgreementMember 2018-05-14 2018-05-15 0001408198 msci:SeniorNotesAndRevolvingCreditFacilityMember 2019-06-30 0001408198 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember 2019-06-30 0001408198 us-gaap:OtherNoncurrentAssetsMember 2019-06-30 0001408198 msci:LongTermDebtsMember 2019-06-30 0001408198 srt:MaximumMember 2019-01-01 2019-06-30 0001408198 srt:MaximumMember 2019-06-30 0001408198 srt:RestatementAdjustmentMember us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 2019-01-01 0001408198 msci:TwoThousandSixteenRepurchaseProgramMember 2016-10-26 0001408198 msci:TwoThousandEighteenRepurchaseProgramMember 2019-06-30 0001408198 msci:TwoThousandEighteenRepurchaseProgramMember 2018-05-01 0001408198 msci:TwoThousandSixteenRepurchaseProgramMember 2018-05-01 0001408198 msci:OpenMarketPurchasesOfCommonStockMember 2019-01-01 2019-06-30 0001408198 msci:OpenMarketPurchasesOfCommonStockMember 2018-01-01 2018-06-30 0001408198 msci:CommonStockIssuedMember 2018-12-31 0001408198 msci:CommonStockOutstandingMember 2018-12-31 0001408198 msci:CommonStockIssuedMember 2019-01-01 2019-03-31 0001408198 msci:CommonStockOutstandingMember 2019-01-01 2019-03-31 0001408198 msci:CommonStockIssuedMember 2019-03-31 0001408198 msci:CommonStockOutstandingMember 2019-03-31 0001408198 msci:CommonStockIssuedMember 2019-04-01 2019-06-30 0001408198 msci:CommonStockOutstandingMember 2019-04-01 2019-06-30 0001408198 msci:CommonStockIssuedMember 2019-06-30 0001408198 msci:CommonStockOutstandingMember 2019-06-30 0001408198 us-gaap:AccountingStandardsUpdate201609Member us-gaap:NewAccountingPronouncementEarlyAdoptionEffectMember 2019-01-01 2019-06-30 0001408198 us-gaap:AccountingStandardsUpdate201609Member us-gaap:NewAccountingPronouncementEarlyAdoptionEffectMember 2018-01-01 2018-06-30 0001408198 us-gaap:ShareBasedCompensationAwardTrancheOneMember 2019-01-01 2019-06-30 0001408198 srt:MinimumMember 2019-01-01 2019-06-30 0001408198 us-gaap:StateAndLocalJurisdictionMember us-gaap:NewYorkStateDivisionOfTaxationAndFinanceMember msci:MorganStanleyMember srt:MinimumMember 2019-01-01 2019-06-30 0001408198 us-gaap:StateAndLocalJurisdictionMember us-gaap:NewYorkStateDivisionOfTaxationAndFinanceMember msci:MorganStanleyMember srt:MaximumMember 2019-01-01 2019-06-30 0001408198 us-gaap:DomesticCountryMember us-gaap:InternalRevenueServiceIRSMember msci:MorganStanleyMember srt:MinimumMember 2019-01-01 2019-06-30 0001408198 us-gaap:DomesticCountryMember us-gaap:InternalRevenueServiceIRSMember msci:MorganStanleyMember srt:MaximumMember 2019-01-01 2019-06-30 msci:Segment 0001408198 country:US 2019-04-01 2019-06-30 0001408198 country:US 2018-04-01 2018-06-30 0001408198 country:US 2019-01-01 2019-06-30 0001408198 country:US 2018-01-01 2018-06-30 0001408198 msci:OtherAmericaCountriesMember 2019-04-01 2019-06-30 0001408198 msci:OtherAmericaCountriesMember 2018-04-01 2018-06-30 0001408198 msci:OtherAmericaCountriesMember 2019-01-01 2019-06-30 0001408198 msci:OtherAmericaCountriesMember 2018-01-01 2018-06-30 0001408198 srt:AmericasMember 2019-04-01 2019-06-30 0001408198 srt:AmericasMember 2018-04-01 2018-06-30 0001408198 srt:AmericasMember 2019-01-01 2019-06-30 0001408198 srt:AmericasMember 2018-01-01 2018-06-30 0001408198 country:GB 2019-04-01 2019-06-30 0001408198 country:GB 2018-04-01 2018-06-30 0001408198 country:GB 2019-01-01 2019-06-30 0001408198 country:GB 2018-01-01 2018-06-30 0001408198 msci:OtherEuropeMiddleEastAndAfricaCountriesMember 2019-04-01 2019-06-30 0001408198 msci:OtherEuropeMiddleEastAndAfricaCountriesMember 2018-04-01 2018-06-30 0001408198 msci:OtherEuropeMiddleEastAndAfricaCountriesMember 2019-01-01 2019-06-30 0001408198 msci:OtherEuropeMiddleEastAndAfricaCountriesMember 2018-01-01 2018-06-30 0001408198 us-gaap:EMEAMember 2019-04-01 2019-06-30 0001408198 us-gaap:EMEAMember 2018-04-01 2018-06-30 0001408198 us-gaap:EMEAMember 2019-01-01 2019-06-30 0001408198 us-gaap:EMEAMember 2018-01-01 2018-06-30 0001408198 country:JP 2019-04-01 2019-06-30 0001408198 country:JP 2018-04-01 2018-06-30 0001408198 country:JP 2019-01-01 2019-06-30 0001408198 country:JP 2018-01-01 2018-06-30 0001408198 msci:OtherAsiaAndAustraliaCountriesMember 2019-04-01 2019-06-30 0001408198 msci:OtherAsiaAndAustraliaCountriesMember 2018-04-01 2018-06-30 0001408198 msci:OtherAsiaAndAustraliaCountriesMember 2019-01-01 2019-06-30 0001408198 msci:OtherAsiaAndAustraliaCountriesMember 2018-01-01 2018-06-30 0001408198 msci:AsiaAndAustraliaMember 2019-04-01 2019-06-30 0001408198 msci:AsiaAndAustraliaMember 2018-04-01 2018-06-30 0001408198 msci:AsiaAndAustraliaMember 2019-01-01 2019-06-30 0001408198 msci:AsiaAndAustraliaMember 2018-01-01 2018-06-30 0001408198 country:US 2019-06-30 0001408198 country:US 2018-12-31 0001408198 msci:OtherAmericaCountriesMember 2019-06-30 0001408198 msci:OtherAmericaCountriesMember 2018-12-31 0001408198 srt:AmericasMember 2019-06-30 0001408198 srt:AmericasMember 2018-12-31 0001408198 country:GB 2019-06-30 0001408198 country:GB 2018-12-31 0001408198 msci:OtherEuropeMiddleEastAndAfricaCountriesMember 2019-06-30 0001408198 msci:OtherEuropeMiddleEastAndAfricaCountriesMember 2018-12-31 0001408198 us-gaap:EMEAMember 2019-06-30 0001408198 us-gaap:EMEAMember 2018-12-31 0001408198 country:JP 2019-06-30 0001408198 country:JP 2018-12-31 0001408198 msci:OtherAsiaAndAustraliaCountriesMember 2019-06-30 0001408198 msci:OtherAsiaAndAustraliaCountriesMember 2018-12-31 0001408198 msci:AsiaAndAustraliaMember 2019-06-30 0001408198 msci:AsiaAndAustraliaMember 2018-12-31 0001408198 us-gaap:SubsequentEventMember 2019-07-30 2019-07-30

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 001-33812

 

MSCI INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

 

13-4038723

(State or other jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification Number)

 

 

 

7 World Trade Center

250 Greenwich Street, 49th Floor

New York, New York

 

10007

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (212804-3900

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common stock, par value $0.01 per share

 

MSCI

 

New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of July 26, 2019, there were 84,698,630 shares of the registrant’s common stock, par value $0.01, outstanding.

 

 


 

MSCI INC.

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2019

TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

Part I

 

 

Item 1.

 

Financial Statements

 

5

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

24

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

47

Item 4.

 

Controls and Procedures

 

48

 

 

 

 

 

 

 

Part II

 

 

Item 1.

 

Legal Proceedings

 

49

Item 1A.

 

Risk Factors

 

49

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

49

Item 3.

 

Defaults Upon Senior Securities

 

49

Item 4.

 

Mine Safety Disclosures

 

50

Item 5.

 

Other Information

 

50

Item 6.

 

Exhibits

 

51

 

 

2


 

AVAILABLE INFORMATION

MSCI Inc. files annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). The SEC maintains a website that contains annual, quarterly and current reports, proxy and information statements and other information that issuers (including MSCI Inc.) file electronically with the SEC. MSCI Inc.’s electronic SEC filings are available to the public at the SEC’s website, www.sec.gov.

MSCI Inc.’s website is www.msci.com. You can access MSCI Inc.’s Investor Relations homepage at http://ir.msci.com. MSCI Inc. makes available free of charge, on or through its Investor Relations homepage, its proxy statements, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. MSCI Inc. also makes available, through its Investor Relations homepage, via a link to the SEC’s website, statements of beneficial ownership of MSCI Inc.’s equity securities filed by its directors, officers, 5% or greater shareholders and others under Section 16 of the Exchange Act.

You can access information about MSCI Inc.’s corporate governance at http://ir.msci.com/corporate-governance.cfm, including copies of the following:

 

Charters for MSCI Inc.’s Audit Committee, Compensation & Talent Management Committee, Nominating and Corporate Governance Committee and Strategy and Finance Committee;

 

Corporate Governance Policies;

 

Procedures for Submission of Ethical or Accounting Related Complaints; and

 

Code of Ethics and Business Conduct.

MSCI Inc.’s Code of Ethics and Business Conduct applies to all directors, officers and employees, including its Chief Executive Officer and its Chief Financial Officer. MSCI Inc. will post any amendments to the Code of Ethics and Business Conduct and any waivers that are required to be disclosed by the rules of either the SEC or the New York Stock Exchange LLC on its website. You can request a copy of these documents, excluding exhibits, at no cost, by contacting Investor Relations, MSCI Inc., 7 World Trade Center, 250 Greenwich Street, 49th Floor, New York, NY 10007; (646) 465-7043. The information on MSCI Inc.’s website is not incorporated by reference into this report or any other report filed or furnished by us with the SEC.

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking 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 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 MSCI’s control and that could materially affect actual results, levels of activity, performance or achievements.

Other factors that could materially affect actual results, levels of activity, performance or achievements can be found in the 2018 Annual Report on Form 10-K filed with the SEC on February 22, 2019 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 MSCI’s underlying assumptions prove to be incorrect, actual results may vary significantly from what MSCI projected. Any forward-looking statement in this report 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.

3


 

WEBSITE AND SOCIAL MEDIA DISCLOSURE

MSCI Inc. uses its website, including its second quarter update, blog, podcasts and social media channels, including its corporate Twitter account (@MSCI_Inc) as channels of distribution of company information. The information MSCI Inc. posts through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following MSCI Inc.’s press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about MSCI Inc. when you enroll your email address by visiting the “Email Alerts Subscription” section of our Investor Relations homepage at http://ir.msci.com/email-alerts. The contents of MSCI Inc.’s website, including its second quarter update, blog, podcasts and social media channels are not, however, incorporated by reference into this report or any other report filed or furnished by us with the SEC.

4


 

PART I

Item 1.

Financial Statements

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except per share and share data)

 

 

 

As of

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

771,117

 

 

$

904,176

 

Accounts receivable (net of allowances of $797 and $1,027 at June 30, 2019 and

   December 31, 2018, respectively)

 

 

438,313

 

 

 

473,433

 

Prepaid income taxes

 

 

80,828

 

 

 

19,273

 

Prepaid and other assets

 

 

32,824

 

 

 

38,207

 

Total current assets

 

 

1,323,082

 

 

 

1,435,089

 

Property, equipment and leasehold improvements (net of accumulated depreciation and

   amortization of $196,480 and $185,505 at June 30, 2019 and December 31, 2018,

   respectively)

 

 

85,875

 

 

 

90,877

 

Right of use assets

 

 

167,934

 

 

 

 

Goodwill

 

 

1,545,724

 

 

 

1,545,761

 

Intangible assets (net of accumulated amortization of $565,730 and $541,967 at

   June 30, 2019 and December 31, 2018, respectively)

 

 

268,091

 

 

 

280,803

 

Deferred tax assets

 

 

15,877

 

 

 

14,903

 

Other non-current assets

 

 

18,507

 

 

 

20,519

 

Total assets

 

$

3,425,090

 

 

$

3,387,952

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

3,489

 

 

$

3,892

 

Income taxes payable

 

 

10,710

 

 

 

16,253

 

Accrued compensation and related benefits

 

 

90,439

 

 

 

137,045

 

Other accrued liabilities

 

 

133,400

 

 

 

113,841

 

Deferred revenue

 

 

528,919

 

 

 

537,977

 

Total current liabilities

 

 

766,957

 

 

 

809,008

 

Long-term debt

 

 

2,577,273

 

 

 

2,575,502

 

Long-term operating lease liabilities

 

 

166,391

 

 

 

 

Deferred tax liabilities

 

 

77,837

 

 

 

82,008

 

Other non-current liabilities

 

 

68,434

 

 

 

87,928

 

Total liabilities

 

 

3,656,892

 

 

 

3,554,446

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies (see Note 7 and Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity (deficit):

 

 

 

 

 

 

 

 

Preferred stock (par value $0.01, 100,000,000 shares authorized; no shares issued)

 

 

 

 

 

 

Common stock (par value $0.01; 750,000,000 common shares authorized; 132,291,958

   and 130,029,926 common shares issued and 84,694,623 and 84,174,138 common

   shares outstanding at June 30, 2019 and December 31, 2018, respectively)

 

 

1,323

 

 

 

1,300

 

Treasury shares, at cost (47,597,335 and 45,855,788 common shares held at June 30, 2019 and

   December 31, 2018, respectively)

 

 

(3,558,845

)

 

 

(3,272,774

)

Additional paid in capital

 

 

1,327,598

 

 

 

1,306,428

 

Retained earnings

 

 

2,055,881

 

 

 

1,856,951

 

Accumulated other comprehensive loss

 

 

(57,759

)

 

 

(58,399

)

Total shareholders' equity (deficit)

 

 

(231,802

)

 

 

(166,494

)

Total liabilities and shareholders' equity (deficit)

 

$

3,425,090

 

 

$

3,387,952

 

 

See Notes to Unaudited Condensed Consolidated Financial Statements

5


 

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

Operating revenues

 

$

385,558

 

 

$

363,046

 

 

$

756,939

 

 

$

714,362

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

71,975

 

 

 

71,368

 

 

 

154,321

 

 

 

142,672

 

Selling and marketing

 

 

51,657

 

 

 

47,416

 

 

 

107,705

 

 

 

93,825

 

Research and development

 

 

23,752

 

 

 

19,801

 

 

 

46,924

 

 

 

40,508

 

General and administrative

 

 

26,378

 

 

 

24,036

 

 

 

53,875

 

 

 

50,223

 

Amortization of intangible assets

 

 

12,013

 

 

 

19,537

 

 

 

23,806

 

 

 

30,875

 

Depreciation and amortization of property, equipment and

   leasehold improvements

 

 

7,405

 

 

 

7,377

 

 

 

15,255

 

 

 

15,582

 

Total operating expenses

 

 

193,180

 

 

 

189,535

 

 

 

401,886

 

 

 

373,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

192,378

 

 

 

173,511

 

 

 

355,053

 

 

 

340,677

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(3,345

)

 

 

(4,281

)

 

 

(7,431

)

 

 

(7,051

)

Interest expense

 

 

35,915

 

 

 

31,761

 

 

 

71,830

 

 

 

61,321

 

Other expense (income)

 

 

63

 

 

 

(10,292

)

 

 

2,617

 

 

 

(9,354

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense (income), net

 

 

32,633

 

 

 

17,188

 

 

 

67,016

 

 

 

44,916

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

 

159,745

 

 

 

156,323

 

 

 

288,037

 

 

 

295,761

 

Provision for income taxes

 

 

34,055

 

 

 

39,494

 

 

 

(15,845

)

 

 

63,840

 

Net income

 

$

125,690

 

 

$

116,829

 

 

$

303,882

 

 

$

231,921

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per basic common share

 

$

1.48

 

 

$

1.31

 

 

$

3.60

 

 

$

2.59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per diluted common share

 

$

1.47

 

 

$

1.28

 

 

$

3.55

 

 

$

2.52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding used in computing

   earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

84,750

 

 

 

89,112

 

 

 

84,503

 

 

 

89,591

 

Diluted

 

 

85,393

 

 

 

91,586

 

 

 

85,522

 

 

 

92,084

 

 

See Notes to Unaudited Condensed Consolidated Financial Statements

6


 

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

Net income

 

$

125,690

 

 

$

116,829

 

 

$

303,882

 

 

$

231,921

 

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(853

)

 

 

(12,484

)

 

 

680

 

 

 

(8,522

)

Income tax effect

 

 

308

 

 

 

 

 

 

(39

)

 

 

 

Foreign currency translation adjustments, net

 

 

(545

)

 

 

(12,484

)

 

 

641

 

 

 

(8,522

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension and other post-retirement adjustments

 

 

(51

)

 

 

194

 

 

 

(31

)

 

 

94

 

Income tax effect

 

 

39

 

 

 

(72

)

 

 

30

 

 

 

(45

)

Pension and other post-retirement adjustments, net

 

 

(12

)

 

 

122

 

 

 

(1

)

 

 

49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment hedge adjustments

 

 

 

 

 

1,814

 

 

 

 

 

 

1,937

 

Income tax effect

 

 

 

 

 

 

 

 

 

 

 

 

Net investment hedge adjustments, net

 

 

 

 

 

1,814

 

 

 

 

 

 

1,937

 

Other comprehensive (loss) income, net of tax

 

 

(557

)

 

 

(10,548

)

 

 

640

 

 

 

(6,536

)

Comprehensive income

 

$

125,133

 

 

$

106,281

 

 

$

304,522

 

 

$

225,385

 

 

See Notes to Unaudited Condensed Consolidated Financial Statements

7


 

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

Common

 

 

Treasury

 

 

Paid in

 

 

Retained

 

 

Comprehensive

 

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Earnings

 

 

Income (Loss)

 

 

Total

 

 

 

(unaudited)

 

Balance at December 31, 2018

 

$

1,300

 

 

$

(3,272,774

)

 

$

1,306,428

 

 

$

1,856,951

 

 

$

(58,399

)

 

$

(166,494

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

178,192

 

 

 

 

 

 

 

178,192

 

Dividends declared ($0.58 per common share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(55,339

)

 

 

 

 

 

 

(55,339

)

Dividends paid in shares

 

 

 

 

 

 

 

 

 

 

93

 

 

 

 

 

 

 

 

 

 

 

93

 

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,197

 

 

 

1,197

 

Common stock issued

 

 

23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23

 

Shares withheld for tax withholding and exercises

 

 

 

 

 

 

(182,385

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(182,385

)

Compensation payable in common stock and options

 

 

 

 

 

 

 

 

 

 

9,590

 

 

 

 

 

 

 

 

 

 

 

9,590

 

Common stock repurchased and held in treasury

 

 

 

 

 

 

(102,081

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(102,081

)

Common stock issued to directors and held in treasury

 

 

 

 

 

 

(30

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30

)

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

726

 

 

 

 

 

 

 

 

 

 

 

726

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2019

 

$

1,323

 

 

$

(3,557,270

)

 

$

1,316,837

 

 

$

1,979,804

 

 

$

(57,202

)

 

$

(316,508

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

125,690

 

 

 

 

 

 

 

125,690

 

Dividends declared ($0.58 per common share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(49,613

)

 

 

 

 

 

 

(49,613

)

Dividends paid in shares

 

 

 

 

 

 

 

 

 

 

30

 

 

 

 

 

 

 

 

 

 

 

30

 

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(557

)

 

 

(557

)

Common stock issued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld for tax withholding and exercises

 

 

 

 

 

 

(742

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(742

)

Compensation payable in common stock and options

 

 

 

 

 

 

 

 

 

 

10,566

 

 

 

 

 

 

 

 

 

 

 

10,566

 

Common stock repurchased and held in treasury

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued to directors and held in treasury

 

 

 

 

 

 

(833

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(833

)

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

165

 

 

 

 

 

 

 

 

 

 

 

165