MSCI Reports Financial Results for Third Quarter and Nine Months 2015

Oct 29, 2015 at 7:00 AM EDT

MSCI Reports Financial Results for Third Quarter and Nine Months 2015 839.6 KB

NEW YORK--(BUSINESS WIRE)-- 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 September 30, 2015 ("third quarter 2015") and nine months ended September 30, 2015 ("nine months 2015"). The Company also adopted segment reporting and outlined its long-term Company and segment targets for revenue growth and adjusted EBITDA margins.

Financial and Operational Highlights

(Note: Results exclude discontinued operations. Percentage and other changes refer to third quarter 2014 unless otherwise noted.)

Diluted EPS of $0.59 vs. $0.44; adjusted EPS of $0.60 vs. $0.50, excluding the after-tax impact of discontinued operations, amortization of intangible assets and a $6.3 million gain on sale of investment.
Net income increased 24.5% to $64.4 million, operating expenses decreased 4.7% to $159.7 million and net cash provided by operating activities increased 24.5% to $134.0 million.
6.8% increase in revenue combined with 6.5% decline in adjusted EBITDA expenses drove a 26.4% increase in adjusted EBITDA.
740 basis point increase in adjusted EBITDA margin to 47.9%; highest margin level since fourth quarter 2012.
Total Run Rate grew 6.1% to $1,062.3 million for third quarter 2015; subscription Run Rate up 7.8% adjusting for FX impact.
Repurchased 5.6 million shares for a total value of $346.2 million in the quarter; additional 2.3 million shares repurchased after quarter-end for a total value of $134.5 million.
$935.5 million of capital returned to shareholders through October 14, 2015 since the September 2014 announcement of the enhanced capital return plan targeting $1 billion in capital return by the end of 2016.
Board approves new $1 billion share repurchase authorization after completion of $850 million authorization.

"We are very pleased with MSCI's strong performance in the third quarter. Solid revenue growth, coupled with very strong cost discipline, resulted in a 740 basis point increase in our adjusted EBITDA margin, the highest level since the fourth quarter of 2012. In addition, we repurchased approximately 8 million shares in the quarter, and through October," commented Henry A. Fernandez, Chairman and CEO of MSCI.

"We are introducing segment reporting this quarter, which reflects the way we are managing the Company and provides investors with increased transparency into MSCI's results. This new level of disclosure will provide investors with greater insights into the drivers of MSCI's performance, so they can fully value our franchise as we continue to focus on creating an integrated set of product lines."

Mr. Fernandez added, "We are also providing investors with long-term targets for the Company and each of its segments. These targets were set as part of management's and the Board's recent comprehensive strategic planning process and reflect our confidence in the potential for continued strong growth in our Index segment, improved profitability in our Analytics segment, and strong growth and improved profitability in our All Other segment, which consists of our ESG and Real Estate products. We believe we have built a foundation for continued value creation for our shareholders in the years to come."

Table 1: Selected Consolidated Financial and Operating Information (unaudited)


	Three Months Ended					Nine Months Ended
	Sep. 30,		Sep. 30,			Sep. 30,	Sep. 30,
$ in thousands, except per share and share data	2015		2014		% Change	2015	2014		% Change
Operating revenues	$	268,771	$	251,661	6.8%	$802,120	$	745,575	7.6%
Operating income	$	109,102	$	84,036	29.8%	$296,355	$	252,072	17.6%
% operating margin		40.6%		33.4%		36.9%		33.8%
Income from continuing operations	$	64,398	$	51,724	24.5%	$170,039	$	155,673	9.2%
Net Income	$	64,398	$	51,714	24.5%	$164,242	$	239,773	(31.5%)

Diluted EPS from continuing operations	$	0.59	$	0.44	34.1%	$1.52	$	1.32	15.2%
Diluted EPS	$	0.59	$	0.44	34.1%	$1.47	$	2.03	(27.6%)
Diluted weighted average common shares outstanding		109,440		117,163	(6.6%)	111,951		117,803	(5.0%)

Adjusted net income¹	$	65,726	$	59,208	11.0%	$186,341	$	178,136	4.6%
Adjusted EPS¹	$	0.60	$	0.50	20.0%	$1.66	$	1.51	9.9%
Adjusted EBITDA²	$	128,861	$	101,952	26.4%	$354,783	$	304,449	16.5%
Adjusted EBITDA margin		47.9%		40.5%		44.2%		40.8%
Net cash provided by operating activities	$	133,963	$	107,567	24.5%	$224,672	$	201,619	11.4%
Free cash flow³	$	121,713	$	87,294	39.4%	$194,085	$	159,382	21.8%

Employees		2,743		2,876	(4.6%)
% Employees by location
Developed Market Centers		48%		50%
Emerging Market Centers		52%		50%

¹Adjusted 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 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."

²Net Income before income from discontinued operations, net of income taxes, provision for income taxes, other expense (income), net, depreciation and amortization. See Table 9 titled "Reconciliation of Adjusted EBITDA to Net Income (unaudited)" and information about the use of non-GAAP financial information provided under "Notes Regarding the Use of Non-GAAP Financial Measures."

³ 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."

Third Quarter 2015 Consolidated Results

Revenues: Operating revenues for third quarter 2015 increased $17.1 million, or 6.8%, to $268.8 million, compared to $251.7 million for the three months ended September 30, 2014 ("third quarter 2014"). The $17.1 million increase was primarily driven by a $13.9 million, or 7.0%, increase in recurring subscription revenues and a $4.1 million, or 8.7%, increase in asset-based fees, slightly offset by lower non-recurring revenues in the quarter. Adjusting for the impact of foreign currency exchange rate fluctuations, recurring subscription revenues for third quarter 2015 would have increased 8.6%.

For nine months 2015, operating revenues increased $56.5 million, or 7.6%, to $802.1 million compared to $745.6 million for the nine months ended September 30, 2014 ("nine months 2014"). The $56.5 million increase was primarily driven by a $41.5 million, or 6.9%, increase in recurring subscription revenues and a $16.1 million, or 12.2%, increase in asset-based fees, slightly offset by lower non-recurring revenues. Adjusting for the impact of foreign currency exchange rate fluctuations, recurring subscription revenues would have increased 9.0% for nine months 2015.

Run Rate: Total Run Rate at the end of third quarter 2015 grew by $61.1 million, or 6.1%, to $1,062.3 million, compared to September 30, 2014. The $61.1 million increase was primarily driven by a $51.0 million, or 6.2%, increase in subscription Run Rate and a $10.0 million, or 5.6%, increase in asset-based fee Run Rate. Subscription Run Rate in third quarter 2015 would have increased 7.8%, adjusting for the impact of foreign currency exchange rate fluctuations.

Expenses: Total operating expenses from continuing operations decreased $8.0 million, or 4.7%, from third quarter 2014 to $159.7 million. The $8.0 million decrease was primarily driven by lower compensation and benefits costs and general cost discipline across most activities. See Table 15 titled "Historical Operating Results with Activity Costs (unaudited)" for a re-casting of historical periods for activity costs. Adjusting for the impact of foreign currency exchange rate fluctuations, operating expenses for third quarter 2015 would have decreased 0.4%.

For nine months 2015, total operating expenses from continuing operations increased $12.3 million, or 2.5%, to $505.8 million and included, among other things, the impact of a $3.4 million non-cash charge for the termination of a technology project in first quarter 2015. Adjusting for the impact of foreign currency exchange rate fluctuations, total operating expenses from continuing operations for nine months 2015 would have increased 6.9%.

Adjusted EBITDA expenses, defined as operating expenses less depreciation and amortization, were $139.9 million in third quarter 2015, a decrease of $9.8 million, or 6.5%, compared to third quarter 2014. Adjusting for the impact of foreign currency exchange rate fluctuations, adjusted EBITDA expenses for third quarter 2015 would have decreased 2.0%.

For nine months 2015, adjusted EBITDA expenses were $447.3 million, an increase of $6.2 million, or 1.4%, compared to the prior year period. Adjusting for the impact of foreign currency exchange rate fluctuations, adjusted EBITDA expenses for nine months 2015 would have increased 6.1%. See Table 11 titled "Reconciliation of Adjusted EBITDA Expenses to Operating Expenses (unaudited)" and "Notes Regarding the Use of Non-GAAP Financial Measures" below.

Headcount: Total employees as of September 30, 2015 was 2,743, down 133 from the prior year, and down 36 from the end of second quarter 2015. A total of 48% and 52% of employees were located in developed market and emerging market centers, respectively, compared to 50% for both developed market and emerging market centers in the prior year, reflecting the Company's continuing efforts to locate employees in emerging market centers.

Other Expense (Income), Net: Other expense (income), net for third quarter 2015 increased $6.0 million compared to third quarter 2014 driven by higher interest expense 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. The higher interest expense was partially offset by a $6.3 million gain on sale of investment in third quarter 2015.

Tax Rate: The effective tax rate was 35.0% for third quarter 2015, compared to 35.3% in third quarter 2014. The effective tax rate was 35.6% for nine months 2015, versus 34.5% for nine months 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 $128.9 million in third quarter 2015, up 26.4% from third quarter 2014. Adjusted EBITDA margin in third quarter 2015 was 47.9%, compared to 40.5% in third quarter 2014.

For nine months 2015, adjusted EBITDA was $354.8 million, up 16.5% from nine months 2014, and adjusted EBITDA margin was 44.2%, compared to 40.8% for nine months 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 third quarter 2015 was $993.5 million, of which $101.8 million is held outside of the United States. Since the end of third quarter 2015, a total of $134.5 million has been used to repurchase shares. Total debt as of September 30, 2015 was $1,600.0 million, which excludes deferred financing fees of $21.2 million. Net debt, defined as total debt less cash and cash equivalents, was $606.5 million. Total debt to adjusted EBITDA ratio (based on trailing twelve months adjusted EBITDA) was 3.5x, which is at the high end of the previously stated financial policy of maintaining leverage of 3.0x to 3.5x.

Cash Flow & Capex: Net cash provided by operating activities was $134.0 million in third quarter 2015, compared to $107.6 million in third quarter 2014, and $224.7 million for nine months 2015, compared to $201.6 million for nine months 2014. Free cash flow, defined as net cash provided by operating activities, less capex (defined as capital expenditures plus capitalized software development costs) for third quarter 2015 increased $34.4 million, or 39.4%, to $121.7 million, compared to $87.3 million in third quarter 2014. The year-over-year increase reflects timing of interest and tax payments as well as improved operating results. For nine months 2015, free cash flow increased $34.7 million, or 21.8%, to $194.1 million, compared to $159.4 million for nine months 2014.

Capex for third quarter 2015 was $12.3 million, compared to $20.3 million in third quarter 2014. For nine months 2015, capex was $30.6 million, compared to $42.2 million for nine months 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 third quarter 2015 declined 6.6% to 109.4 million, compared to 117.2 million in third quarter 2014. The decrease was driven by buybacks under the share repurchase program. Total shares outstanding as of September 30, 2015 was 104.9 million.

In third quarter 2015, we repurchased 5.6 million shares for a total of $346.2 million with an average price of $61.95 per share. Since the end of third quarter 2015 and through October 14, 2015, an additional 2.3 million shares were repurchased for a total value of $134.5 million, exhausting the $850.0 million share repurchase authorization. A total of 14.7 million shares were repurchased under this authorization at an average price of $57.99 per share. On October 28, 2015, the Board of Directors approved a new share repurchase authorization of up to $1.0 billion.

Since the announcement of the enhanced capital return plan in September 2014, whereby we committed to return $1.0 billion to shareholders by the end of 2016, approximately $936.0 million has been returned to date through share repurchases and cash dividends.

On October 28, 2015, the Board of Directors declared a cash dividend of $0.22 per share for fourth quarter 2015. The fourth quarter 2015 dividend is payable on November 30, 2015 to shareholders of record as of the close of trading on November 13, 2015.

Table 2: Third Quarter 2015 Operating Results by Segment (unaudited)
Below is a summary of the segment results. See Tables 5 and 13 for historical results by segment.

	Index			Analytics			All Other
	Operating	Adjusted	Adjusted	Operating	Adjusted	Adjusted	Operating	Adjusted	Adjusted
In thousands	Revenues	EBITDA	EBITDA Margin	Revenues	EBITDA	EBITDA Margin	Revenues	EBITDA	EBITDA Margin
QTD Q3'15	$141,577	$102,927	72.7%	$108,341	$29,216	27.0%	$18,853	($3,282)	-17.4%
QTD Q3'14	$129,869	$91,031	70.1%	$103,247	$16,788	16.3%	$18,545	($5,867)	-31.6%
% change	9.0%	13.1%		4.9%	74.0%		1.7%	44.1%

YTD Q3'15	$415,262	$293,997	70.8%	$322,756	$64,560	20.0%	$64,102	($3,774)	-5.9%
YTD Q3'14	$374,429	$259,289	69.2%	$308,661	$52,345	17.0%	$62,485	($7,185)	-11.5%
% change	10.9%	13.4%		4.6%	23.3%		2.6%	47.5%

Index Segment: Operating revenues for third quarter 2015 increased $11.7 million, or 9.0%, to $141.6 million, compared to $129.9 million for third quarter 2014. The $11.7 million increase was driven by a $7.8 million, or 9.6%, increase in recurring subscription revenue and a $4.1 million, or 8.7%, increase in asset-based fees slightly offset by lower non-recurring revenue. The $7.8 million increase in recurring subscription revenue was primarily driven by higher revenues from subscriptions to benchmark and data products. Adjusting for the impact of foreign currency exchange rate fluctuations, recurring subscription revenues for third quarter 2015 would have increased 10.5%. The increase in asset-based fees was driven by an increase in revenues from both ETF and non-ETF institutional passive funds. Average AUM in ETFs linked to MSCI indexes increased $32.3 billion, or 8.4%. Higher trading volumes in futures and options contracts based on MSCI indexes also contributed to the increase. Asset-based fees declined slightly from the second quarter 2015 level, however, due to the recent spike in market volatility, driving a $23.2 billion, or 5.3%, decrease in average AUM in ETFs linked to MSCI indexes. The decline in average AUM compared to second quarter 2015 was due entirely to market depreciation, partially offset by positive cash inflows in the quarter.

The adjusted EBITDA margin for Index was 72.7% in third quarter 2015, compared to 70.1% in the prior year period. The increase was primarily driven by higher revenues, as well as a 0.5% decline in adjusted EBITDA expenses.

For nine months 2015, operating revenues increased $40.8 million, or 10.9%, to $415.3 million, compared to $374.4 million for nine months 2014. The $40.8 million increase was driven by a $24.2 million, or 10.2%, increase in recurring subscription revenue and a $16.1 million, or 12.2%, increase in asset-based fees. The $24.2 million increase in recurring subscription revenue was driven primarily by growth in benchmark and data products. Adjusting for the impact of foreign currency exchange rate fluctuations, recurring subscription revenues for nine months 2015 would have increased 11.1%. The increase in asset-based fees was driven by a $58.5 billion, or 16.3%, increase in average AUM in ETFs linked to MSCI indexes. Growth in non-ETF institutional passive assets and higher trading volumes in futures and options contracts based on MSCI indexes also contributed to the increase.

The adjusted EBITDA margin for Index for nine months 2015 was 70.8%, compared to 69.2% in the prior year period. The increase in margin was due to higher revenues, offset by a 5.3% increase in adjusted EBITDA expenses.

Total Index operating revenues represented 52.7% and 51.8% of MSCI's total operating revenues in third quarter and nine months 2015, respectively.

Index Run Rate at the end of third quarter 2015 grew by $45.2 million, or 9.0%, to $549.0 million, compared to September 30, 2014. The $45.2 million increase was primarily driven by a $35.2 million, or 10.8%, increase in recurring subscription Run Rate and a $10.0 million, or 5.6%, increase in asset-based fee Run Rate. The increase in recurring subscription Run Rate was driven by higher revenues from subscriptions to benchmark and data products. The increase in Run Rate attributable to asset-based fees was primarily driven by growth in AUM in non-ETF institutional passive funds linked to MSCI indexes. There was a negligible impact from foreign currency exchange rate fluctuations on Index recurring subscription Run Rate.

Analytics Segment: Operating revenues for third quarter 2015 increased $5.1 million, or 4.9%, to $108.3 million compared to $103.2 million in third quarter 2014. The increase was primarily driven by higher RiskManager, BarraOne and InvestorForce sales. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics operating revenues for third quarter 2015 would have increased 6.6%.

The adjusted EBITDA margin for Analytics was 27.0%, compared to 16.3% in the prior year. The increase was due to higher revenues, as well as an 8.5% decline in adjusted EBITDA expenses. The decrease in expenses was primarily attributable to lower compensation and benefits costs from lower staffing levels, higher capitalization related to the development of the new Analytics architecture and interface, and lower non-compensation costs driven by strong cost discipline.

For nine months 2015, operating revenues increased $14.1 million, or 4.6%, to $322.8 million, compared to $308.7 million for nine months 2014. The $14.1 million increase was primarily driven by higher RiskManager, HedgePlatform, BarraOne and InvestorForce sales. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics operating revenues for nine months 2015 would have increased 6.3%.

The adjusted EBITDA margin for Analytics was 20.0% for nine months 2015, compared to 17.0% in the prior year. The increase was driven by higher revenues, offset by a 0.7% increase in adjusted EBITDA expenses.

Total Analytics operating revenues represented 40.3% and 40.2% of MSCI's total operating revenues in third quarter and nine months 2015, respectively.

Analytics Run Rate at the end of third quarter 2015 grew by $12.4 million, or 3.0%, to $430.4 million, compared to September 30, 2014. The increase in Run Rate was primarily driven by an increase in RiskManager sales. Analytics Run Rate at September 30, 2015 would have increased 4.9%, adjusting for the impact of foreign currency exchange rate fluctuations.

All Other Segment (consisting of ESG and Real Estate products lines): Operating revenues for third quarter 2015 increased $0.3 million, or 1.7%, to $18.9 million, compared to $18.5 million in third quarter 2014. The increase in All Other revenue was driven by a $2.1 million, or 28.4%, increase in ESG revenue, which was partially offset by a $1.8 million decline in Real Estate revenue. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other operating revenues for third quarter 2015 would have increased 6.6%.

The adjusted EBITDA margin for All Other was a negative 17.4% for third quarter 2015, compared to a negative 31.6% in the prior year period. The improvement in margin was primarily driven by a 9.3% decline in adjusted EBITDA expenses.

For nine months 2015, operating revenues increased $1.6 million, or 2.6%, to $64.1 million compared to $62.5 million for nine months 2014. The increase in All Other revenue was driven by an $8.0 million, or 40.8%, increase in ESG revenue, partially offset by a $6.4 million decline in Real Estate revenue. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other operating revenues for nine months 2015 would have increased 10.9%.

The adjusted EBITDA margin for All Other was a negative 5.9% for nine months 2015, compared to a negative 11.5% in the prior year period. The improvement in margin was due to an increase in revenues, as well as a 2.6% decline in adjusted EBITDA expenses.

Total All Other operating revenues represented 7.0% and 8.0% of MSCI total operating revenues in third quarter and nine months 2015, respectively.

All Other Run Rate at the end of third quarter 2015 grew by $3.5 million, or 4.3%, to $82.9 million, compared to September 30, 2014. The $3.5 million increase was primarily driven by a $5.3 million increase in ESG Run Rate, partially offset by a $1.9 million, or 4.1%, decline in Real Estate Run Rate primarily due to foreign currency exchange rate fluctuations. Adjusting for the impact of foreign currency exchange rate fluctuations, Real Estate Run Rate at September 30, 2015 would have increased $2.2 million, or 4.8%, and Run Rate for All Other would have increased 10.8%.

Updated Full-Year 2015 Guidance

MSCI's guidance for full-year 2015 is as follows:

Full-year 2015 adjusted EBITDA expenses are now expected to be in the range of $595 million to $600 million. Based on the new full-year range, fourth quarter 2015 adjusted EBITDA expenses are now expected to be in the range of $148 million to $153 million, which is expected to reduce adjusted EBITDA margins from third quarter 2015 levels across all segments. Previously, full-year 2015 adjusted EBITDA expenses were expected at the low-end of the stated range of $620 million to $640 million.
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 2015 interest expense, including the amortization of financing fees, is now expected to be approximately $63 million, compared to the previous guidance of approximately $45 million. The increase reflects the impact of the private offering of $800 million 5.75% senior notes due 2025 completed in August 2015.
Full-year 2015 free cash flow is now expected to be in the range of $255 million to $270 million, compared to the previous range of $245 million to $275 million.
Full-year 2015 capex, which includes capitalized software developments costs, is now expected to be in the range of $45 million to $50 million, compared to the previous range of $45 million to $55 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.

The effective tax rate expected for full-year 2015 remains in the range of 35% to 36%.

Long-Term Targets

Following a recent comprehensive review of the Company's strategic objectives by management and the Board of Directors and the adoption of segment reporting, MSCI is outlining its long-term targets for revenue growth and adjusted EBITDA margins for its three reportable segments: Index, Analytics and All Other.

The long-term targets below assume a constant business portfolio and stable market conditions in line with current market conditions.
The long-term targets below do not include the impact of significant swings in assets under management in ETFs linked to MSCI indexes or other forms of passive investment products linked to MSCI indexes.
The terms "high," "medium" and "low" refer to target levels of annual growth in revenue in percentage terms and may fluctuate quarter-to-quarter. "High" revenue growth is defined as low double-digit growth, "medium" revenue growth is defined as upper single-digit growth and "low" revenue growth is defined as low to mid single-digit growth.
The long-term targets for MSCI and its reportable segments are as follows:

% of Current

Revenue Growth Target

Adj. EBITDA Margin

Segment

Revenue (Q3'15)

Current / Target

Target Range

Index

53%

High / High

68% - 72%

Analytics

40%

Low / Medium

30% - 35%

All Other

Medium / High

15% - 20%

MSCI

100%

Medium / High

~ 50%

Reconciliations of adjusted EBITDA included in the long-term targets identified above are not included in this earnings release as we are unable to quantify certain amounts that would be required to be included in the corresponding GAAP measure without unreasonable efforts, and we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors. Additionally, the targets identified above are long-term targets and are not necessarily indicative of the actual or expected results or growth trajectory of any future quarter or year. MSCI assumes no obligation to publicly update or revise these long-term targets for any reason, whether as a result of new information, future events, or otherwise, except as required by law.

Conference Call Information

MSCI Inc.'s senior management will review third quarter 2015 results on Thursday, October 29, 2015 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 October 31, 2015. To listen to the recording, visit http://ir.msci.com/events.cfm, or dial 1-800-585-8367 (passcode: 57552776) within the United States. International callers dial 1-404-537-3406 (passcode: 57552776). 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 2015 guidance and our long-term targets. 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 our control and that could materially affect our actual results, levels of activity, performance or achievements.

Other factors that could materially affect our 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 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.

Table 3: Condensed Consolidated Statements of Income (unaudited)

	Three Months Ended									Nine Months Ended
	Sep. 30,			Sep. 30,			Jun. 30,			Sep. 30,			Sep. 30,
In thousands, except per share data	2015			2014			2015			2015			2014

Operating revenues	$	268,771		$	251,661		$	270,580		$	802,120		$	745,575
Operating expenses
Cost of revenues		65,593			69,770			67,394			202,891			206,784
Selling and marketing		38,809			41,402			42,028			122,485			123,034
Research and development		15,548			19,021			20,807			59,544			53,860
General and administrative		19,960			19,516			22,080			62,417			57,448
Amortization of intangible assets		11,710			11,574			11,695			35,107			34,286
Depreciation and amortization of property,
equipment and leasehold improvements		8,049			6,342			8,065			23,321			18,091
Total operating expenses¹		159,669			167,625			172,069			505,765			493,503

Operating income		109,102			84,036			98,511			296,355			252,072

Interest income		(285	)		(277	)		(185	)		(674	)		(625	)
Interest expense		17,267			5,604			11,116			39,491			16,029
Other expense (income)		(6,922	)		(1,287	)		164			(6,580	)		(942	)
Other expenses (income), net		10,060			4,040			11,095			32,237			14,462

Income from continuing operations before
provision for income taxes		99,042			79,996			87,416			264,118			237,610

Provision for income taxes		34,644			28,272			31,399			94,079			81,937
Income from continuing operations		64,398			51,724			56,017			170,039			155,673

Income (loss) from discontinued operations, net of income taxes		-			(10	)		-			(5,797	)		84,100
Net Income	$	64,398		$	51,714		$	56,017		$	164,242		$	239,773

Earnings per basic common share from:
Continuing operations	$	0.59		$	0.44		$	0.50		$	1.53		$	1.33
Discontinued operations		-			-			-			(0.05	)		0.72
Earnings per basic common share	$	0.59		$	0.44		$	0.50		$	1.48		$	2.05

Earnings per diluted common share from:
Continuing operations	$	0.59		$	0.44		$	0.50		$	1.52		$	1.32
Discontinued operations		-			-			-			(0.05	)		0.71
Earnings per diluted common share	$	0.59		$	0.44		$	0.50		$	1.47		$	2.03

Weighted average shares outstanding used in computing earnings per share:
Basic		108,773			116,251			112,143			111,131			116,840
Diluted		109,440			117,163			112,931			111,951			117,803

¹ Includes stock-based compensation expense of $5.5 million, $7.3 million, and $6.8 million for the three months ended Sep. 30, 2015, Sep. 30, 2014, and Jun. 30, 2015, respectively. Includes stock-based compensation expense of $19.3 million and $17.8 million for the nine months ended Sep. 30, 2015 and Sep. 30, 2014, respectively.

Table 4: Selected Balance Sheet Items (unaudited)

	As of
	Sep. 30,		Jun. 30,		Dec. 31,
In thousands	2015		2015		2014

Cash and cash equivalents	$	993,488	$	455,021	$	508,799
Accounts receivable, net of allowances	$	208,239	$	214,487	$	178,717

Deferred revenue	$	328,051	$	338,763	$	310,775
Long-term debt, net of current maturities¹	$	1,578,849	$	788,945	$	788,358

¹ Consists of long-term debt of $1.6 billion, net of deferred financing fees of $21.2 million, as of Sep. 30, 2015; long-term debt of $800 million, net of deferred financing fees of $11.1 million, as of Jun. 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												Three Months Ended												Three Months Ended
	Sep. 30, 2015												Sep. 30, 2014												Jun. 30, 2015
In thousands	Index			Analytics			All Other			Consolidated			Index			Analytics			All Other			Consolidated			Index			Analytics			All Other			Consolidated
Operating Revenues
Recurring subscription	$	89,139		$	107,065		$	17,569		$	213,773		$	81,349		$	102,237		$	16,272		$	199,858		$	87,530		$	106,372		$	21,664		$	215,566
Asset-based fees		50,736			-			-			50,736			46,657			-			-			46,657			51,160			-			-			51,160
Non-recurring		1,702			1,276			1,284			4,262			1,863			1,010			2,273			5,146			1,441			1,198			1,215			3,854
Total revenues	$	141,577		$	108,341		$	18,853		$	268,771		$	129,869		$	103,247		$	18,545		$	251,661		$	140,131		$	107,570		$	22,879		$	270,580
Adjusted EBITDA	$	102,927		$	29,216		$	(3,282	)	$	128,861		$	91,031		$	16,788		$	(5,867	)	$	101,952		$	98,017		$	21,264		$	(1,010	)	$	118,271
Adjusted EBITDA margin (%)		72.7	%		27.0	%		(17.4	%)		47.9	%		70.1	%		16.3	%		(31.6	%)		40.5	%		69.9	%		19.8	%		(4.4	%)		43.7	%
Operating margin (%)											40.6	%											33.4	%											36.4	%



							Nine Months Ended												Nine Months Ended
							Sep. 30, 2015												Sep. 30, 2014
	In thousands						Index			Analytics			All Other			Consolidated			Index			Analytics			All Other			Consolidated
	Operating Revenues
	Recurring subscription						$	261,729		$	318,871		$	61,025		$	641,625		$	237,577		$	305,702		$	56,816		$	600,095
	Asset-based fees							147,776			-			-			147,776			131,652			-			-			131,652
	Non-recurring							5,757			3,885			3,077			12,719			5,200			2,959			5,669			13,828
	Total revenues						$	415,262		$	322,756		$	64,102		$	802,120		$	374,429		$	308,661		$	62,485		$	745,575
	Adjusted EBITDA						$	293,997		$	64,560		$	(3,774	)	$	354,783		$	259,289		$	52,345		$	(7,185	)	$	304,449
	Adjusted EBITDA margin (%)							70.8	%		20.0	%		(5.9	%)		44.2	%		69.2	%		17.0	%		(11.5	%)		40.8	%
	Operating margin (%)																36.9	%											33.8	%

Table 6: ETF Assets Linked to MSCI Indexes (unaudited)¹

	Three Months Ended														Nine Months Ended
In billions	Sep. 2015			Jun. 2015			Mar. 2015		Dec. 2014			Sep. 2014			Sep. 2015			Sep. 2014
Beginning Period AUM in ETFs
linked to MSCI Indexes	$	435.4		$	418.0		$	373.3	$	377.9		$	378.7		$	373.3		$	332.9
Cash Inflow/(Outflow)		3.0			24.3			31.7		3.7			16.4			59.0			45.7
Market Appreciation/(Depreciation)		(48.2	)		(6.9	)		13.0		(8.3	)		(17.2	)		(42.1	)		(0.7	)
Period End AUM in ETFs linked
to MSCI Indexes	$	390.2		$	435.4		$	418.0	$	373.3		$	377.9		$	390.2		$	377.9

Period Average AUM in ETFs
linked to MSCI Indexes	$	418.2		$	441.4		$	392.5	$	373.6		$	385.9		$	417.4		$	358.9

Avg. Basis Point Fee²		3.40			3.43			3.38		3.39			3.51			3.40			3.51

Source: Bloomberg and MSCI
¹ETF 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 Run Rate Type (unaudited)

		Three Months Ended						% Change from
		Sep. 30,		Sep. 30,		Jun. 30,		Sep. 30,	Jun. 30,
In thousands		2015		2014		2015		2014	2015

Index
	Recurring subscriptions	$	361,209	$	326,010	$	353,026	10.8%	2.3%
	Asset-based fees		187,818		177,774		201,221	5.6%	(6.7%)
	Total Index Run Rate¹	$	549,027	$	503,784	$	554,247	9.0%	(0.9%)


Analytics
	Risk management analytics
	Recurring subscriptions	$	319,637	$	311,019	$	315,901	2.8%	1.2%
	Portfolio management analytics
	Recurring subscription		110,740		106,993		109,532	3.5%	1.1%
	Total Analytics Run Rate¹	$	430,377	$	418,012	$	425,433	3.0%	1.2%


All Other
	ESG
	Recurring subscriptions	$	38,850	$	33,522	$	37,235	15.9%	4.3%
	Real Estate
	Recurring subscriptions		44,027		45,902		45,854	(4.1%)	(4.0%)
	Total All Other Run Rate¹	$	82,877	$	79,424	$	83,089	4.3%	(0.3%)


Consolidated
	Total recurring subscription Run Rate	$	874,463	$	823,446	$	861,548	6.2%	1.5%
	Total asset-based fees Run Rate		187,818		177,774		201,221	5.6%	(6.7%)
	Total Run Rate¹	$	1,062,281	$	1,001,220	$	1,062,769	6.1%	--

¹The 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															Nine Months Ended
In thousands		Sep. 2015			Jun. 2015			Mar. 2015			Dec. 2014			Sep. 2014			Sep. 2015			Sep. 2014

Index
	New recurring subscription sales	$	11,810		$	12,459		$	11,550		$	12,938		$	9,239		$	35,819		$	31,609
	Subscription cancellations		(3,852	)		(3,871	)		(2,384	)		(3,665	)		(3,588	)		(10,107	)		(10,644	)
	Net new recurring subscription sales	$	7,958		$	8,588		$	9,166		$	9,273		$	5,651		$	25,712		$	20,965
	Non-recurring sales	$	1,719		$	2,137		$	2,329		$	2,217		$	2,437		$	6,185		$	6,740
	Total Index net sales	$	9,677		$	10,725		$	11,495		$	11,490		$	8,088		$	31,897		$	27,705

	Index Aggregate Retention Rate¹		95.4	%		95.4	%		97.2	%		95.2	%		95.3	%		96.0	%		95.3	%


Analytics
	Risk management analytics
	New recurring subscription sales	$	8,133		$	9,242		$	9,980		$	10,694		$	10,550		$	27,355		$	31,515
	Subscription cancellations		(3,668	)		(4,542	)		(5,325	)		(8,624	)		(4,218	)		(13,535	)		(17,380	)
	Net new recurring subscription sales	$	4,465		$	4,700		$	4,655		$	2,070		$	6,332		$	13,820		$	14,135
	Non-recurring sales	$	1,357		$	2,194		$	1,174		$	1,331		$	818		$	4,725		$	3,291
	Total risk management analytics net sales	$	5,822		$	6,894		$	5,829		$	3,401		$	7,150		$	18,545		$	17,426

	Portfolio management analytics
	New recurring subscription sales	$	2,257		$	3,196		$	3,530		$	3,325		$	3,393		$	8,983		$	10,054
	Subscription cancellations		(1,230	)		(1,905	)		(2,099	)		(1,766	)		(1,642	)		(5,234	)		(5,403	)
	Net new recurring subscription sales	$	1,027		$	1,291		$	1,431		$	1,559		$	1,751		$	3,749		$	4,651
	Non-recurring sales	$	24		$	45		$	2		$	90		$	45		$	71		$	125
	Total portfolio management analytics net sales	$	1,051		$	1,336		$	1,433		$	1,649		$	1,796		$	3,820		$	4,776

	Analytics
	New recurring subscription sales	$	10,390		$	12,438		$	13,510		$	14,019		$	13,943		$	36,338		$	41,569
	Subscription cancellations		(4,898	)		(6,447	)		(7,424	)		(10,390	)		(5,860	)		(18,769	)		(22,783	)
	Net new recurring subscription sales	$	5,492		$	5,991		$	6,086		$	3,629		$	8,083		$	17,569		$	18,786
	Non-recurring sales	$	1,381		$	2,239		$	1,176		$	1,421		$	863		$	4,796		$	3,416
	Total Analytics net sales	$	6,873		$	8,230		$	7,262		$	5,050		$	8,946		$	22,365		$	22,202

	Analytics Aggregate Retention Rate¹		95.3	%		93.8	%		92.9	%		89.7	%		94.2	%		94.0	%		92.5	%


All Other
	ESG
	New recurring subscription sales	$	2,549		$	2,043		$	2,193		$	2,260		$	1,837		$	6,785		$	4,667
	Subscription cancellations		(716	)		(531	)		(514	)		(917	)		(332	)		(1,761	)		(888	)
	Net new recurring subscription sales	$	1,833		$	1,512		$	1,679		$	1,343		$	1,505		$	5,024		$	3,779
	Non-recurring sales	$	146		$	53		$	122		$	67		$	167		$	321		$	423
	Total ESG net sales	$	1,979		$	1,565		$	1,801		$	1,410		$	1,672		$	5,345		$	4,202

	Real Estate
	New recurring subscription sales	$	759		$	2,635		$	2,272		$	2,715		$	1,192		$	5,666		$	7,866
	Subscription cancellations		(1,449	)		(1,321	)		(1,328	)		(2,052	)		(699	)		(4,098	)		(3,315	)
	Net new recurring subscription sales	$	(690	)	$	1,314		$	944		$	663		$	493		$	1,568		$	4,551
	Non-recurring sales	$	908		$	1,271		$	788		$	1,371		$	1,159		$	2,967		$	4,516
	Total Real Estate net sales	$	218		$	2,585		$	1,732		$	2,034		$	1,652		$	4,535		$	9,067

	All Other
	New recurring subscription sales	$	3,308		$	4,678		$	4,465		$	4,975		$	3,029		$	12,451		$	12,533
	Subscription cancellations		(2,165	)		(1,852	)		(1,842	)		(2,969	)		(1,031	)		(5,859	)		(4,203	)
	Net new recurring subscription sales	$	1,143		$	2,826		$	2,623		$	2,006		$	1,998		$	6,592		$	8,330
	Non-recurring sales	$	1,054		$	1,324		$	910		$	1,438		$	1,326		$	3,288		$	4,939
	Total All Other net sales	$	2,197		$	4,150		$	3,533		$	3,444		$	3,324		$	9,880		$	13,269

	All Other Aggregate Retention Rate¹		89.1	%		90.7	%		90.7	%		83.9	%		94.3	%		90.1	%		92.3	%


Consolidated
	New recurring subscription sales	$	25,508		$	29,575		$	29,525		$	31,932		$	26,211		$	84,608		$	85,711
	Subscription cancellations		(10,915	)		(12,170	)		(11,650	)		(17,024	)		(10,479	)		(34,735	)		(37,630	)
	Net new recurring subscription sales	$	14,593		$	17,405		$	17,875		$	14,908		$	15,732		$	49,873		$	48,081
	Non-recurring sales	$	4,154		$	5,700		$	4,415		$	5,076		$	4,626		$	14,269		$	15,095
	Total net sales	$	18,747		$	23,105		$	22,290		$	19,984		$	20,358		$	64,142		$	63,176

	Total Aggregate Retention Rate¹		94.8	%		94.2	%		94.4	%		91.3	%		94.6	%		94.4	%		93.6	%

¹The 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									Nine Months Ended
	Sep. 30,			Sep. 30,			Jun. 30,			Sep. 30,			Sep. 30,
In thousands	2015			2014			2015			2015			2014
Index adjusted EBITDA	$	102,927		$	91,031		$	98,017		$	293,997		$	259,289
Analytics adjusted EBITDA		29,216			16,788			21,264			64,560			52,345
All Other adjusted EBITDA		(3,282	)		(5,867	)		(1,010	)		(3,774	)		(7,185	)
Consolidated adjusted EBITDA		128,861			101,952			118,271			354,783			304,449
Amortization of intangible assets		11,710			11,574			11,695			35,107			34,286
Depreciation and amortization of property,
equipment and leasehold improvements		8,049			6,342			8,065			23,321			18,091
Operating income		109,102			84,036			98,511			296,355			252,072
Other expense (income), net		10,060			4,040			11,095			32,237			14,462
Provision for income taxes		34,644			28,272			31,399			94,079			81,937
Income from continuing operations		64,398			51,724			56,017			170,039			155,673
Income (loss) from discontinued operations,
net of income taxes		-			(10	)		-			(5,797	)		84,100
Net income	$	64,398		$	51,714		$	56,017		$	164,242		$	239,773

Table 10: Reconciliation of Adjusted Net Income and Adjusted EPS to Net Income and EPS (unaudited)

				Three Months Ended						Nine Months Ended
	Sep. 30,			Sep. 30,			Jun. 30,			Sep. 30,			Sep. 30,
In thousands, except per share data	2015			2014			2015			2015			2014
Net Income	$	64,398		$	51,714		$	56,017		$	164,242		$	239,773

Less: Income (loss) from discontinued
operations, net of income taxes		-			(10	)		-			(5,797	)		84,100

Income from continuing operations		64,398			51,724			56,017			170,039			155,673
Plus: Amortization of intangible assets		11,710			11,574			11,695			35,107			34,286
Less: Gain on sale of investment		(6,300	)		-			-			(6,300	)		-
Less: Income tax effect		(4,082	)		(4,090	)		(4,201	)		(12,505	)		(11,823	)
Adjusted Net Income	$	65,726		$	59,208		$	63,511		$	186,341		$	178,136

Diluted EPS	$	0.59		$	0.44		$	0.50		$	1.47		$	2.03

Less: Earnings per diluted common
share from discontinued operations		-			-			-			(0.05	)		0.71
Earnings per diluted common share from
continuing operations		0.59			0.44			0.50			1.52			1.32
Plus: Amortization of intangible assets		0.11			0.10			0.10			0.31			0.29
Less: Gain on sale of investment		(0.06	)		-			-			(0.06	)		-
Less: Income tax effect		(0.04	)		(0.04	)		(0.04	)		(0.11	)		(0.10	)
Adjusted EPS	$	0.60		$	0.50		$	0.56		$	1.66		$	1.51

Table 11: Reconciliation of Adjusted EBITDA Expenses to Operating Expenses (unaudited)

	Three Months Ended						Nine Months Ended				Full Year
	Sep. 30,		Sep. 30,		Jun. 30,		Sep. 30,		Sep. 30,		2015
In thousands	2015		2014		2015		2015		2014		Outlook
Index adjusted EBITDA expenses	$	38,650	$	38,838	$	42,114	$	121,265	$	115,140
Analytics adjusted EBITDA expenses		79,125		86,459		86,306		258,196		256,316
All Other adjusted EBITDA expenses		22,135		24,412		23,889		67,876		69,670
Consolidated adjusted EBITDA expenses		139,910		149,709		152,309		447,337		441,126	$	595,000 - $600,000
Amortization of intangible assets		11,710		11,574		11,695		35,107		34,286	77,000 to 79,000
Depreciation and amortization of property,
equipment and leasehold improvements		8,049		6,342		8,065		23,321		18,091
Total operating expenses	$	159,669	$	167,625	$	172,069	$	505,765	$	493,503	$	672,000 - $679,000

Table 12: Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities (unaudited)

	Three Months Ended									Nine Months Ended						Full Year
	Sep. 30,			Sep. 30,			Jun. 30,			Sep. 30,			Sep. 30,			2015
In thousands	2015			2014			2015			2015			2014			Outlook
Net cash provided by
operating activities	$	133,963		$	107,567		$	24,026		$	224,672		$	201,619		$305,000 - $315,000
Capital expenditures		(8,975	)		(17,688	)		(10,616	)		(24,525	)		(36,174	)
Capitalized software development costs		(3,275	)		(2,585	)		(1,401	)		(6,062	)		(6,063	)
Capex		(12,250	)		(20,273	)		(12,017	)		(30,587	)		(42,237	)	(50,000 - 45,000)

Free cash flow	$	121,713		$	87,294		$	12,009		$	194,085		$	159,382		$255,000 - $ 270,000

Table 13: Historical Results by Segment (unaudited)

In thousands	Index	Analytics	All Other	Consolidated Results
Three Months Ended Mar. 31, 2015
Operating revenue	$ 133,554	$ 106,845	$ 22,370	$ 262,769
Adjusted EBITDA	$ 93,053	$ 14,080	$ 518	$ 107,651
Adjusted EBITDA margin	69.7%	13.2%	2.3%	41.0%
Operating margin				33.8%
Three Months Ended Jun. 30, 2015
Operating revenue	$ 140,131	$ 107,570	$ 22,879	$ 270,580
Adjusted EBITDA	$ 98,017	$ 21,264	$ (1,010)	$ 118,271
Adjusted EBITDA margin	69.9%	19.8%	-4.4%	43.7%
Operating margin				36.4%
Three Months Ended Sep. 30, 2015
Operating revenue	$ 141,577	$ 108,341	$ 18,853	$ 268,771
Adjusted EBITDA	$ 102,927	$ 29,216	$ (3,282)	$ 128,861
Adjusted EBITDA margin	72.7%	27.0%	-17.4%	47.9%
Operating margin				40.6%
Nine Months Ended Sep. 30, 2015
Operating revenue	$ 415,262	$ 322,756	$ 64,102	$ 802,120
Adjusted EBITDA	$ 293,997	$ 64,560	$ (3,774)	$ 354,783
Adjusted EBITDA margin	70.8%	20.0%	-5.9%	44.2%
Operating margin				36.9%

In thousands	Index	Analytics	All Other	Consolidated Results
Three Months Ended Mar. 31, 2014
Operating revenue	$ 119,107	$ 101,445	$ 19,136	$ 239,688
Adjusted EBITDA	$ 82,089	$ 17,849	$ (3,335)	$ 96,603
Adjusted EBITDA margin	68.9%	17.6%	-17.4%	40.3%
Operating margin				33.2%
Three Months Ended Jun. 30, 2014
Operating revenue	$ 125,453	$ 103,969	$ 24,804	$ 254,226
Adjusted EBITDA	$ 86,169	$ 17,708	$ 2,017	$ 105,894
Adjusted EBITDA margin	68.7%	17.0%	8.1%	41.7%
Operating margin				34.8%
Three Months Ended Sep. 30, 2014
Operating revenue	$ 129,869	$ 103,247	$ 18,545	$ 251,661
Adjusted EBITDA	$ 91,031	$ 16,788	$ (5,867)	$ 101,952
Adjusted EBITDA margin	70.1%	16.3%	-31.6%	40.5%
Operating margin				33.4%
Three Months Ended Dec. 31, 2014
Operating revenue	$ 129,463	$ 105,425	$ 16,217	$ 251,105
Adjusted EBITDA	$ 90,396	$ 19,829	$ (5,920)	$ 104,305
Adjusted EBITDA margin	69.8%	18.8%	-36.5%	41.5%
Operating margin				33.9%
Year Ended Dec. 31, 2014
Operating revenue	$ 503,892	$ 414,086	$ 78,702	$ 996,680
Adjusted EBITDA	$ 349,685	$ 72,174	$ (13,105)	$ 408,754
Adjusted EBITDA margin	69.4%	17.4%	-16.7%	41.0%
Operating margin				33.8%

In thousands	Index	Analytics	All Other	Consolidated Results
Three Months Ended Mar. 31, 2013
Operating revenue	$ 108,410	$ 98,066	$ 12,993	$ 219,469
Adjusted EBITDA	$ 78,084	$ 26,780	$ (6,210)	$ 98,654
Adjusted EBITDA margin	72.0%	27.3%	-47.8%	45.0%
Operating margin				37.8%
Three Months Ended Jun. 30, 2013
Operating revenue	$ 109,922	$ 96,253	$ 22,248	$ 228,423
Adjusted EBITDA	$ 80,413	$ 23,279	$ 1,828	$ 105,520
Adjusted EBITDA margin	73.2%	24.2%	8.2%	46.2%
Operating margin				39.4%
Three Months Ended Sep. 30, 2013
Operating revenue	$ 112,831	$ 98,991	$ 16,786	$ 228,608
Adjusted EBITDA	$ 80,604	$ 23,132	$ (3,196)	$ 100,540
Adjusted EBITDA margin	71.4%	23.4%	-19.0%	44.0%
Operating margin				36.7%
Three Months Ended Dec. 31, 2013
Operating revenue	$ 117,251	$ 103,893	$ 15,720	$ 236,864
Adjusted EBITDA	$ 84,457	$ 24,615	$ (8,638)	$ 100,434
Adjusted EBITDA margin	72.0%	23.7%	-54.9%	42.4%
Operating margin				35.3%
Year Ended December 31, 2013
Operating revenue	$ 448,414	$ 397,203	$ 67,747	$ 913,364
Adjusted EBITDA	$ 323,558	$ 97,806	$ (16,216)	$ 405,148
Adjusted EBITDA margin	72.2%	24.6%	-23.9%	44.4%
Operating margin				37.3%

Table 14: Reconciliation of Adjusted EBITDA to Net Income (unaudited)

	Three Months Ended									Nine Months Ended
	Mar. 31,			Jun. 30,			Sep. 30,			Sep. 30,
In thousands	2015			2015			2015			2015
Net income	$	43,827		$	56,017		$	64,398		$	164,242
Income (loss) from discontinued operations,
net of income taxes		(5,797	)		-			-			(5,797	)
Income from continuing operations		49,624			56,017			64,398			170,039
Provision for income taxes		28,036			31,399			34,644			94,079
Other expense (income), net		11,082			11,095			10,060			32,237
Operating income		88,742			98,511			109,102			296,355
Depreciation and amortization of property,
equipment and leasehold improvements		7,207			8,065			8,049			23,321
Amortization of intangible assets		11,702			11,695			11,710			35,107
Consolidated adjusted EBITDA	$	107,651		$	118,271		$	128,861		$	354,783


	Three Months Ended												Year Ended
	Mar. 31,			Jun. 30,			Sep. 30,			Dec. 31,			Dec. 31,
In thousands	2014			2014			2014			2014			2014
Net income	$	80,399		$	107,660		$	51,714		$	44,340		$	284,113
Income (loss) from discontinued operations,
net of income taxes		33,253			50,857			(10	)		1,071			85,171
Income from continuing operations		47,146			56,803			51,724			43,269			198,942
Provision for income taxes		26,385			27,280			28,272			27,459			109,396
Other expense (income), net		5,974			4,448			4,040			14,366			28,828
Operating income		79,505			88,531			84,036			85,094			337,166
Depreciation and amortization of property,
equipment and leasehold improvements		5,828			5,921			6,342			7,620			25,711
Amortization of intangible assets		11,270			11,442			11,574			11,591			45,877
Consolidated adjusted EBITDA	$	96,603		$	105,894		$	101,952		$	104,305		$	408,754


	Three Months Ended												Year Ended
	Mar. 31,			Jun. 30,			Sep. 30,			Dec. 31,			Dec. 31,
In thousands	2013			2013			2013			2013			2013
Net income	$	58,937		$	61,053		$	55,310		$	47,257		$	222,557
Income (loss) from discontinued operations,
net of income taxes		5,979			4,912			5,374			6,382			22,647
Income from continuing operations		52,958			56,141			49,936			40,875			199,910
Provision for income taxes		21,232			27,763			27,804			36,119			112,918
Other expense (income), net		8,701			5,985			6,164			6,653			27,503
Operating income		82,891			89,889			83,904			83,647			340,331
Depreciation and amortization of property,
equipment and leasehold improvements		4,597			4,774			5,443			5,570			20,384
Amortization of intangible assets		11,166			11,222			11,193			11,217			44,798
Lease exit charge		-			(365	)		-			-			(365	)
Consolidated adjusted EBITDA	$	98,654		$	105,520		$	100,540		$	100,434		$	405,148

Table 15: Historical Operating Results with Activity Costs (unaudited)

	Year Ended			Three Months Ended												Year Ended			Three Months Ended									Nine Months Ended
	Dec. 31,			Mar. 31,			Jun. 30,			Sep. 30,			Dec. 31,			Dec. 31,			Mar. 31,			Jun. 30,			Sep. 30,			Sep. 30,
In thousands	2013			2014			2014			2014			2014			2014			2015			2015			2015			2015
Operating revenues	$	913,364		$	239,688		$	254,226		$	251,661		$	251,105		$	996,680		$	262,769		$	270,580		$	268,771		$	802,120
Operating expenses:
Cost of revenues		240,697			66,802			70,212			69,770			69,839			276,623			69,904			67,394			65,593			202,891
Selling and marketing		137,693			41,126			40,506			41,402			40,805			163,839			41,648			42,028			38,809			122,485
Research and development		61,003			17,465			17,374			19,021			17,235			71,095			23,189			20,807			15,548			59,544
General and administrative		68,458			17,692			20,240			19,516			18,921			76,369			20,377			22,080			19,960			62,417
Amortization of intangible assets		44,798			11,270			11,442			11,574			11,591			45,877			11,702			11,695			11,710			35,107
Depreciation and amortization of property,
equipment and leasehold improvements		20,384			5,828			5,921			6,342			7,620			25,711			7,207			8,065			8,049			23,321
Total operating expenses		573,033			160,183			165,695			167,625			166,011			659,514			174,027			172,069			159,669			505,765
Operating income		340,331			79,505			88,531			84,036			85,094			337,166			88,742			98,511			109,102			296,355

Interest income		(889	)		(156	)		(192	)		(277	)		(226	)		(851	)		(204	)		(185	)		(285	)		(674	)
Interest expense		26,256			5,059			5,366			5,604			15,791			31,820			11,108			11,116			17,267			39,491
Other expense (income)		2,136			1,071			(726	)		(1,287	)		(1,199	)		(2,141	)		178			164			(6,922	)		(6,580	)
Other expense (income), net		27,503			5,974			4,448			4,040			14,366			28,828			11,082			11,095			10,060			32,237
Income from continuing operations before provision
for income taxes		312,828			73,531			84,083			79,996			70,728			308,338			77,660			87,416			99,042			264,118
Provision for income taxes		112,918			26,385			27,280			28,272			27,459			109,396			28,036			31,399			34,644			94,079

Income from continuing operations		199,910			47,146			56,803			51,724			43,269			198,942			49,624			56,017			64,398			170,039
Income (loss) from discontinued operations,
net of income taxes		22,647			33,253			50,857			(10	)		1,071			85,171			(5,797	)		-			-			(5,797	)
Net income	$	222,557		$	80,399		$	107,660		$	51,714		$	44,340		$	284,113		$	43,827		$	56,017		$	64,398		$	164,242

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