Investor News

NEW YORK--(BUSINESS WIRE)-- MSCI Inc. (NYSE:MSCI), a leading global provider of investment decision support tools, including indexes, portfolio risk and performance analytics and corporate governance services, today announced results for the fourth quarter and full year ended December 31, 2013.

(Note: Percentage changes are referenced to the comparable period in 2012, unless otherwise noted.)

• Operating revenues increased 8.3% to $267.6 million for fourth quarter 2013 and 9.0% to $1.0 billion for full year 2013.
• Net income declined 13.2% to $47.3 million for fourth quarter 2013. Net income for the quarter was negatively impacted by higher income tax expense and non-recurring expenses. For full year 2013, net income grew 20.8% to $222.6 million.
• Diluted EPS for fourth quarter 2013 declined 11.4% to $0.39. Full year 2013 Diluted EPS increased 23.6% to $1.83.
• Adjusted EBITDA¹ fell 2.2% to $114.0 million for fourth quarter 2013, reflecting a margin of 42.6%. For full year 2013, Adjusted EBITDA grew 4.4% to $453.5 million, reflecting a margin of 43.8%.
• Fourth quarter 2013 Adjusted EPS² declined 7.7% to $0.48. Full year 2013 Adjusted EPS rose 11.3% to $2.16.
• Run Rate grew 8.6% to $1.1 billion for fourth quarter 2013, driven by subscription growth of 6.2%. Asset-based fees grew 24.6%.
• MSCI will enter into another $100 million accelerated share repurchase ("ASR") agreement, which will complete the December 2012 $300 million buyback authorization. The Board of Directors also authorized the repurchase of an additional $300 million in shares.

Table 1: MSCI Inc. Selected Financial Information (unaudited)
			Three Months Ended								Change from			Year Ended								Change From
			December 31,				December 31,				December 31,			December 31,				December 31,				December 31,
In thousands, except per share data				2013				2012			2012			2013					2012			2012
Operating revenues			$	267,622			$	247,080			8.3	%		$	1,035,667			$	950,141			9.0	%
Operating expenses				176,251				151,773			16.1	%			664,161				603,205			10.1	%
Net income				47,257				54,452			(13.2	%)			222,557				184,238			20.8	%
% Margin				17.7	%			22.0	%						21.5	%			19.4	%
Diluted EPS			$	0.39			$	0.44			(11.4	%)		$	1.83			$	1.48			23.6	%
Adjusted EPS2			$	0.48			$	0.52			(7.7	%)		$	2.16			$	1.94			11.3	%
Adjusted EBITDA1			$	113,994			$	116,567			(2.2	%)		$	453,467			$	434,460			4.4	%
% Margin				42.6	%			47.2	%						43.8	%			45.7	%

1 Net Income before income taxes, other expense (income), net, non-recurring stock-based compensation, depreciation, amortization, strategic review expenses, the lease exit charge and restructuring costs. See Table 13 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."

2 Per share net income before after-tax impact of non-recurring stock-based compensation, amortization of intangibles, debt repayment and refinancing expenses, strategic review expenses, the lease exit charge and restructuring costs. See Table 14 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."

"MSCI's Run Rate grew by 9% in the fourth quarter, an indication that our efforts to broaden our ETF relationships, introduce new factor indexes, enhance our risk measurement analytics and deepen our engagement with clients around the world are having an impact on our operating results," Henry A. Fernandez, Chairman and CEO, said.

"Our success resulted in part from the investments in our sales, client service, and product development teams that we made over the course of 2013 as well as in years past. As the operating environment continues to improve, we believe our clients' need for MSCI's investment decision support tools will only increase. We intend to make the investments necessary to stay ahead of their increasing demands and are confident that our investment program will put MSCI on track for additional growth," he added.

"We have repurchased more than $200 million of MSCI shares since December of 2012 and announced another $100 million share repurchase program today. We remain committed to returning excess capital to our shareholders," Mr. Fernandez concluded.

Summary of Results for Fourth Quarter 2013 Compared to Fourth Quarter 2012

Operating Revenues - See Table 4

Operating revenues for the three months ended December 31, 2013 ("fourth quarter 2013") increased $20.5 million, or 8.3%, to $267.6 million compared to $247.1 million for the three months ended December 31, 2012 ("fourth quarter 2012"). For the purposes of analyzing revenue trends, organic growth percentages are calculated using comparable operating results. Accordingly, organic growth percentages for the fourth quarter 2013 reflect the results of IPD Group Limited ("IPD"), which was acquired on November 30, 2012, for the months of December 2012 and December 2013, and exclude the results of Investor Force Holdings, Inc. ("InvestorForce"), which was acquired on January 29, 2013, and the CFRA product line, which was sold on March 31, 2013. On an organic basis, operating revenues grew by 5.9%.

Fourth quarter 2013 recurring subscription revenues rose $19.7 million, or 9.8%, to $221.7 million and rose 6.8% on an organic basis. Asset-based fees increased $1.1 million, or 2.8%, to $39.2 million and non-recurring revenues fell $0.2 million to $6.7 million.

Performance and Risk segment revenues rose $20.9 million, or 9.7%, to $236.9 million and rose 5.8% on an organic basis. The increase was primarily driven by higher revenues from index and environmental, social and governance ("ESG") products and risk management analytics.

• Index and ESG products: Index and ESG product revenues increased $15.6 million, or 13.3%, to $133.0 million. Subscription revenues grew by $14.5 million, or 18.3%, to $93.8 million, driven by growth in revenues from equity index benchmark products and the acquisition of IPD. On an organic basis, index and ESG subscription revenue growth was 10.9%.
  
  Revenues attributable to equity index asset-based fees rose $1.1 million, or 2.8%, to $39.2 million, largely as a result of higher revenues from non-ETF passive funds. In addition, a change in the mix of ETFs linked to MSCI indexes more than offset a decline of $55.1 billion, or 14.6%, in average assets under management ("AUM") in ETFs linked to MSCI indexes. Excluding the $5.9 million in asset-based fees linked to certain Vanguard ETFs that transitioned during 2013, asset-based fees would have grown by 21.4%.
• Risk management analytics: Revenues related to risk management analytics products increased $8.7 million, or 13.0%, to $75.3 million. On an organic basis, revenues grew by 9.1%, driven by higher revenues from the RiskManager product, reflecting higher sales and the timing of client implementations, and higher revenues from hedge fund transparency products.
• Portfolio management analytics: Revenues related to portfolio management analytics products declined $3.1 million, or 10.8%, to $25.5 million as a result of lower sales and elevated cancellations of equity analytics products in prior periods as well as lower fixed income analytics revenues.
• Energy and commodity analytics: Revenues from energy and commodity analytics products were $3.1 million, a decline of $0.2 million, or 6.2%.

Governance segment revenues fell $0.4 million, or 1.2%, to $30.8 million for fourth quarter 2013, as the loss of revenues resulting from the sale of the CFRA product line more than offset organic growth. On an organic basis, Governance segment revenues rose 7.1%, driven by higher revenues from executive compensation data and analytics products and securities class action services.

Operating Expenses - See Table 6

Total operating expenses rose $24.5 million, or 16.1%, to $176.3 million.

• Compensation costs: Total compensation costs rose $14.1 million, or 15.1%, to $108.0 million for fourth quarter 2013, driven primarily by increased costs from the acquisitions of IPD and InvestorForce and increased hiring, partly offset by the sale of the CFRA product line.
• Non-compensation costs excluding depreciation and amortization, the lease exit charge and strategic review expenses: Non-compensation costs rose $8.6 million, or 23.2%, to $45.7 million for fourth quarter 2013. The increase in non-compensation costs reflects the impact of the acquisitions of IPD and InvestorForce as well as increased recruiting, information technology, occupancy and travel expenses, among other items.
• Depreciation and amortization: Amortization of intangible assets expense totaled $14.8 million for fourth quarter 2013, a decline of 4.3% compared to fourth quarter 2012, primarily due to certain intangibles becoming fully amortized since the prior period, partially offset by additional amortization related to the IPD and InvestorForce acquisitions. Depreciation and amortization of property, equipment and leasehold improvements rose $1.1 million, or 21.1%, to $6.0 million.
• Strategic review expenses: MSCI incurred $1.8 million of expenses as a result of the previously announced decision to explore strategic alternatives for its Governance segment.

Other Expense (Income), Net

Other expense (income), net for fourth quarter 2013 was $6.8 million, a decline of $0.2 million from fourth quarter 2012. Fourth quarter 2013 expense included $1.4 million of debt refinancing expenses related to the credit facility extension. Excluding the impact of the debt refinancing expenses, other expense (income), net declined $1.6 million, driven primarily by lower interest rates and lower indebtedness.

Provision for Income Taxes

The provision for income tax expense was $37.3 million for fourth quarter 2013, up $3.4 million, or 10.2%, from fourth quarter 2012. MSCI increased its fourth quarter 2013 tax expense to reflect a higher than anticipated full year 2013 tax rate. As a result, the effective tax rate for fourth quarter 2013 was 44.1% versus 38.3% a year ago.

Net Income and Earnings per Share - See Table 14

Net income fell $7.2 million, or 13.2%, to $47.3 million for fourth quarter 2013. The net income margin fell to 17.7% from 22.0% as a result of the lower operating profit. Diluted EPS was $0.39, down $0.05, or 11.4%, as a 2.5% decline in weighted average shares outstanding partially offset the impact of lower net income. Adjusted net income, which excludes the after-tax impact of non-recurring stock-based compensation, amortization of intangible assets, debt repayment and refinancing expenses, strategic review expenses, and the lease exit charge fell $6.5 million, or 10.2%, to $57.7 million. Adjusted EPS, which excludes the after-tax, per diluted share impact of non-recurring stock-based compensation, amortization of intangible assets, debt repayment and refinancing expenses, strategic review expenses, the lease exit charge and restructuring costs totaling $0.09, fell $0.04, or 7.7%, to $0.48.

See Table 14 titled "Reconciliation of Adjusted Net Income and Adjusted EPS to Net Income and EPS (unaudited)" and "Notes Regarding the Use of Non-GAAP Financial Measures" below.

Adjusted EBITDA - See Table 13

Adjusted EBITDA, which excludes income taxes, other expense (income), net, non-recurring stock-based compensation, depreciation, amortization, strategic review expenses, the lease exit charge and restructuring costs was $114.0 million, down $2.6 million, or 2.2%, from fourth quarter 2012. The Adjusted EBITDA margin declined to 42.6% from 47.2%.

By segment, Adjusted EBITDA for the Performance and Risk segment declined $3.2 million, or 3.0%, to $104.3 million for fourth quarter 2013. The Adjusted EBITDA margin for this segment fell to 44.0% from 49.8% as a result of the impact of acquisitions and rising expenses resulting from MSCI's investment programs. Adjusted EBITDA for the Governance segment increased $0.6 million, or 7.0%, to $9.7 million and the Adjusted EBITDA margin rose to 31.5% from 29.1%.

See Table 13 titled "Reconciliation of Adjusted EBITDA to Net Income (unaudited)" and "Notes Regarding the Use of Non-GAAP Financial Measures" below.

Summary of Results for Full Year Ended December 31, 2013
Compared to Full Year Ended December 31, 2012

Operating Revenues - See Table 5

Total operating revenues for the full year ended December 31, 2013 ("full year 2013") increased $85.5 million, or 9.0%, to $1,035.7 million compared to $950.1 million for the full year ended December 31, 2012 ("full year 2012"). Subscription revenues rose $76.4 million, or 9.7%, to $860.7 million, while asset-based fees rose $8.6 million, or 6.1%, to $149.5 million. Non-recurring revenues rose $0.5 million to $25.5 million. On an organic basis, total operating revenues grew by 4.4%.

Performance and Risk segment revenues rose $86.4 million, or 10.4%, to $913.4 million for full year 2013, and by 4.2% on an organic basis. Index and ESG products and risk management analytics revenues grew 16.9% and 7.3%, respectively, for full year 2013, or organically by 7.3% and 3.9%, respectively. Portfolio management analytics revenues fell 9.2%. Energy and other commodity analytics revenues increased $3.3 million, or 36.6%, primarily as a result of a $5.2 million non-cash cumulative revenue reduction to correct an error that was recorded in first quarter 2012.

Governance segment revenues were $122.3 million, down slightly versus full year 2012. On an organic basis, revenue grew by 5.6%.

Operating Expenses - See Table 7

Total operating expenses increased $61.0 million, or 10.1%, to $664.2 million for full year 2013 compared to full year 2012 driven primarily by the acquisitions of IPD and InvestorForce. The increase largely reflects increases of $46.5 million, or 12.5%, in total compensation expenses and $15.9 million, or 10.8%, in total non-compensation expenses.

Other Expense (Income), Net

Other expense (income), net for full year 2013 was $25.9 million, a decline of $31.6 million, or 55.0%, from full year 2012. Excluding the impact of debt refinancing expenses of $1.4 million for full year 2013 and $20.6 million for full year 2012, other expense (income), net declined $12.4 million, or 33.6% primarily as a result of a lower cost of debt as well as lower levels of indebtedness.

Provision for Income Taxes

The provision for income tax expense was $123.1 million for full year 2013, up $17.9 million, or 17.0%, from full year 2012. The effective tax rate was 35.6% for full year 2013, versus 36.3% a year ago.

Net Income and Earnings per Share - See Table 14

Net income increased $38.3 million, or 20.8%, to $222.6 million and the net income margin increased to 21.5% from 19.4%. Diluted EPS rose 23.6% to $1.83 from $1.48.

Adjusted net income, which excludes the after-tax impact of non-recurring stock-based compensation expense, amortization of intangible assets, debt repayment and refinancing expenses, strategic review expenses, the lease exit charge and restructuring costs totaling $39.3 million, rose $20.7 million, or 8.6%, to $261.9 million. Adjusted EPS, which excludes the after-tax, per diluted share impact of non-recurring stock-based compensation, amortization of intangible assets, debt repayment and refinancing expenses, strategic review expenses, the lease exit charge and restructuring costs totaling $0.33, rose 11.3% to $2.16 for full year 2013.

See Table 14 titled "Reconciliation of Adjusted Net Income and Adjusted EPS to Net Income and EPS (unaudited)" and "Notes Regarding the Use of Non-GAAP Financial Measures" below.

Adjusted EBITDA - See Table 13

Adjusted EBITDA was $453.5 million, an increase of $19.0 million, or 4.4%, from full year 2012. Adjusted EBITDA margin fell to 43.8% from 45.7%.

By segment, Adjusted EBITDA for the Performance and Risk segment increased $14.6 million, or 3.6%, to $419.3 million from full year 2012. Adjusted EBITDA margin declined to 45.9% for full year 2013 from 48.9% for full year 2012. Adjusted EBITDA for the Governance segment rose $4.4 million, or 14.7%, to $34.2 million for full year 2013. The Adjusted EBITDA margin for the Governance segment was 28.0%, up from 24.2% for full year 2012.

See Table 13 titled "Reconciliation of Adjusted EBITDA to Net Income (unaudited)" and "Notes Regarding the Use of Non-GAAP Financial Measures" below.

Key Operating Metrics - See Tables 10, 11, 12

Total Run Rate grew by $83.0 million, or 8.6%, to $1,050.4 million as of December 31, 2013 compared to December 31, 2012. Total subscription Run Rate grew by $51.7 million, or 6.2%, to $892.1 million as of December 31, 2013 compared to December 31, 2012. On an organic basis, which includes IPD and excludes InvestorForce and CFRA product line, total subscription Run Rate grew by 6.1%. Changes in foreign currency rates had only a nominal impact on the change in total Run Rate during the fourth quarter and versus the prior year.

Performance and Risk segment Run Rate grew by $84.7 million, or 10.0%, to $934.9 million. On an organic basis, Performance and Risk Run Rate grew by 8.8%.

• Index and ESG products: Index and ESG subscription Run Rate grew by $33.5 million, or 9.9%, to $371.5 million, driven primarily by growth in equity index benchmark and data products.
  
  Run Rate attributable to asset-based fees rose $31.2 million, or 24.6%, to $158.3 million. The increase was primarily driven by inflows and higher market performance in ETFs linked to MSCI indexes. The fourth quarter 2012 asset-based fee Run Rate excludes those Vanguard ETFs that later switched benchmarks.
  
  As of December 31, 2013, AUM in ETFs linked to MSCI indexes were $332.9 billion, down $69.4 billion, or 17.3%, from December 31, 2012 but up $30.3 billion, or 10.0%, from September 30, 2013. Of that $30.3 billion sequential increase, net inflows added an additional $19.4 billion and market gains accounted for $10.9 billion.
  
  If the AUM in those Vanguard ETFs which transitioned earlier in 2013 were excluded from the December 31, 2012 balance, AUM in MSCI-linked ETFs would have risen $69.1 billion, or 26.2%, compared to December 31, 2012.

• Risk management analytics: Run Rate related to risk management analytics products increased $28.5 million, or 10.9%, to $290.7 million. On an organic basis, risk management analytics Run Rate grew by 6.9%. MSCI benefited from solid growth in Run Rate from RiskManager and BarraOne. Changes in foreign currency positively benefited Run Rate by $1.2 million versus fourth quarter 2012 and by $0.7 million versus third quarter 2013.
• Portfolio management analytics: Run Rate related to portfolio management analytics products declined $6.7 million, or 6.1%, to $103.1 million. Year-over-year Run Rate was negatively impacted, in part, by product swaps totaling $1.1 million and by changes in foreign currency rates which lowered Run Rate by an additional $2.4 million. On a sequential basis, changes in foreign currency rates reduced portfolio management analytics Run Rate by $0.7 million.
• Energy and commodity analytics: Run Rate from energy and commodity analytics products declined to $11.3 million, down $1.8 million, or 13.9%, from fourth quarter 2012.

Governance Run Rate declined by $1.8 million, or 1.5%, to $115.5 million. On an organic basis, Run Rate grew by 6.6%, reflecting strong growth in the Run Rate of executive compensation data and analytics products and services.

Accelerated Share Repurchase Agreements

During fourth quarter 2013, MSCI settled the $100.0 million ASR agreement it had entered into on August 2, 2013, taking delivery of 0.5 million shares. MSCI repurchased a total of 5.4 million shares under the two ASR agreements into which it had previously entered.

MSCI will enter into a third ASR agreement with Morgan Stanley & Co. LLC ("Morgan Stanley"). Under this new ASR agreement, MSCI will pay Morgan Stanley $100.0 million in cash and receive an initial delivery of shares of its common stock on February 7, 2014. Additional shares may be delivered to MSCI at or prior to maturity of the ASR agreement, which MSCI anticipates will be no later than May 2014. This ASR agreement will complete the $300 million buyback program authorized by the Board of Directors in December 2012.

On February 4, 2014, MSCI's Board of Directors authorized the repurchase of up to $300.0 million of additional shares. The $300.0 million authorization will be available for utilization from time to time at management's discretion.

December 2013 Extension of Senior Credit Facility

During fourth quarter 2013, MSCI extended the maturity of its credit facility to December 12, 2018 from May 4, 2017. MSCI also amended the amortization schedule of required debt payments to significantly reduce the amount of scheduled repayments prior to maturity.

Conference Call Information

Investors will have the opportunity to listen to MSCI Inc.'s senior management review fourth quarter and full year 2013 results on Thursday, February 6, 2014 at 11:00 am Eastern Time. To listen to the live event, visit the investor relations section of MSCI's website, http://ir.msci.com/events.cfm, or dial 1-877-312-9206 within the United States. International callers dial 1-408-774-4001.

An audio recording of the conference call will be available on our website approximately two hours after the conclusion of the live event and will be accessible through February 8, 2014. To listen to the recording, visit http://ir.msci.com/events.cfm, or dial 1-855-859-2056 (passcode: 35536571) within the United States. International callers dial 1-404-537-3406 (passcode: 35536571).

About MSCI

MSCI Inc. is a leading provider of investment decision support tools to investors globally, including asset managers, banks, hedge funds and pension funds. MSCI products and services include indexes, portfolio risk and performance analytics, and governance tools.

MSCI's flagship product offerings are: the MSCI indexes with approximately $7.5 trillion estimated to be benchmarked to them on a worldwide basis¹; Barra multi-asset class factor models, portfolio risk and performance analytics; RiskMetrics multi-asset class market and credit risk analytics; IPD real estate information, indexes and analytics; MSCI ESG (environmental, social and governance) Research screening, analysis and ratings; ISS governance research and outsourced proxy voting and reporting services; and FEA valuation models and risk management software for the energy and commodities markets. MSCI is headquartered in New York, with research and commercial offices around the world. MSCI#IR

¹As of March 31, 2013, as published by eVestment, Lipper and Bloomberg on July 31, 2013

For further information on MSCI, please visit our website at www.msci.com

Forward-Looking Statements

This earnings release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," or "continue," or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect actual results, levels of activity, performance, or achievements.

Other factors that could materially affect actual results, levels of activity, performance or achievements can be found in MSCI's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the Securities and Exchange Commission ("SEC") on March 1, 2013, and in quarterly reports on Form 10-Q and current reports on Form 8-K filed with the SEC, and may also include the risks and uncertainties associated with the process of evaluating strategic alternatives, including whether any appropriate alternatives will be identified and, if identified, whether any such alternative will result in a consummated transaction. 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 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 enroll your email address 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 presentation of non-GAAP financial measures should not be considered as alternative measures for the most directly comparable GAAP financial measures. These measures are used by management to monitor the financial performance of the business, inform business decision making and forecast future results.

Adjusted EBITDA is defined as net income before provision for income taxes, other expense (income), net, non-recurring stock-based compensation, depreciation and amortization of property, equipment and leasehold improvements, amortization of intangible assets, strategic review expenses, the lease exit charge and restructuring costs.

Adjusted net income and Adjusted EPS are defined as net income and EPS, respectively, before provision for non-recurring stock-based compensation, amortization of intangible assets, debt repayment and refinancing costs, strategic review expenses, the lease exit charge and restructuring costs, as well as for any related tax effects.

We believe that adjusting for strategic review expenses, the lease exit charge, restructuring costs and debt repayment and refinancing expenses is useful to management and investors because it allows for an evaluation of MSCI's underlying operating performance. Additionally, we believe that adjusting for non-recurring stock-based compensation expenses, debt repayment and refinancing expenses and 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. 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, Adjusted net income and Adjusted EPS are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies.

Table 2: MSCI Inc. Condensed Consolidated Statements of Income (unaudited)
			Three Months Ended												Year Ended
			December 31,				December 31,				September 30,				December 31,				December 31,
In thousands, except per share data				2013				2012				2013				2013				2012
Operating revenues			$	267,622			$	247,080			$	258,238			$	1,035,667			$	950,141
Operating expenses
Cost of services				84,727				74,191				80,040				328,311				288,075
Selling, general and administrative				70,722				57,172				65,380				255,345				233,183
Restructuring costs				-				-				-				-				(51	)
Amortization of intangible assets				14,760				15,421				14,448				58,203				63,298
Depreciation and amortization of property, equipment and leasehold improvements				6,042				4,989				5,934				22,302				18,700
Total operating expenses			$	176,251			$	151,773			$	165,802			$	664,161			$	603,205
Operating income			$	91,371			$	95,307			$	92,436			$	371,506			$	346,936
Operating margin				34.1	%			38.6	%			35.8	%			35.9	%			36.5	%
Interest income				(261	)			(242	)			(265	)			(1,031	)			(954	)
Interest expense				6,914				7,178				5,827				26,265				56,428
Other expense (income)				154				56				627				651				2,053
Other expenses (income), net			$	6,807			$	6,992			$	6,189			$	25,885			$	57,527
Income before taxes				84,564				88,315				86,247				345,621				289,409
Provision for income taxes				37,307				33,863				30,937				123,064				105,171
Net income			$	47,257			$	54,452			$	55,310			$	222,557			$	184,238
Net income margin				17.7	%			22.0	%			21.4	%			21.5	%			19.4	%
Earnings per basic common share			$	0.40			$	0.44			$	0.46			$	1.85			$	1.50
Earnings per diluted common share			$	0.39			$	0.44			$	0.46			$	1.83			$	1.48
Weighted average shares outstanding used in computing earnings per share
Basic				118,828				122,082				119,607				120,100				122,023
Diluted				119,877				122,995				120,578				121,074				123,204

Table 3: MSCI Inc. Selected Balance Sheet Items (unaudited)
					As of
					December 31,			September 30,			December 31,
In thousands					2013			2013			2012
Cash and cash equivalents					$	358,434		$	283,750		$	183,309
Short-term investments						-			-			70,898
Accounts receivable, net of allowances						169,490			179,920			153,557
Deferred revenue					$	319,735		$	334,094		$	308,022
Current maturities of long-term debt						19,772			54,130			43,093
Long-term debt, net of current maturities						788,010			753,285			811,623

Table 4: Quarterly Operating Revenues by Product Category and Revenue Type (unaudited)
		Three Months Ended									% Change from
		December 31,			December 31,			September 30,			December 31,			September 30,
In thousands		2013			2012			2013			2012			2013
Index and ESG products
Subscriptions		$	93,771		$	79,268		$	92,815		18.3	%		1.0	%
Asset-based fees			39,200			38,138			36,801		2.8	%		6.5	%
Index and ESG products total			132,971			117,406			129,616		13.3	%		2.6	%
Risk management analytics			75,314			66,654			69,666		13.0	%		8.1	%
Portfolio management analytics			25,513			28,606			26,213		(10.8	%)		(2.7	%)
Energy and commodity analytics			3,066			3,270			3,113		(6.2	%)		(1.5	%)
Total Performance and Risk revenues		$	236,864		$	215,936		$	228,608		9.7	%		3.6	%
Total Governance revenues			30,758			31,144			29,630		(1.2	%)		3.8	%
Total operating revenues		$	267,622		$	247,080		$	258,238		8.3	%		3.6	%
Recurring subscriptions		$	221,698		$	202,001		$	216,905		9.8	%		2.2	%
Asset-based fees			39,200			38,138			36,801		2.8	%		6.5	%
Non-recurring revenue			6,724			6,941			4,532		(3.1	%)		48.4	%
Total operating revenues		$	267,622		$	247,080		$	258,238		8.3	%		3.6	%

Table 5: Full Year Operating Revenues by Product Category and Revenue Type (unaudited)
				Year Ended							% Change from
				December 31,			December 31,				December 31,
In thousands				2013				2012			2012
Index and ESG products
Subscriptions				$	366,674		$	300,630			22.0	%
Asset-based fees					149,486			140,883			6.1	%
Index and ESG products total					516,160			441,513			16.9	%
Risk management analytics					279,353			260,276			7.3	%
Portfolio management analytics					105,461			116,133			(9.2	%)
Energy and commodity analytics
Recurring Energy and commodity analytics					12,390			14,271			(13.2	%)
Correction1					-			(5,203	)		n/m
Net energy and commodity analytics					12,390			9,068			36.6	%
Total Performance and Risk revenues				$	913,364		$	826,990			10.4	%
Total Governance revenues					122,303			123,151			(0.7	%)
Total operating revenues				$	1,035,667		$	950,141			9.0	%
Recurring subscriptions				$	860,730		$	784,331			9.7	%
Asset-based fees					149,486			140,883			6.1	%
Non-recurring revenue					25,451			24,927			2.1	%
Total operating revenues				$	1,035,667		$	950,141			9.0	%

n/m = not meaningful
1 In first quarter 2012, MSCI recorded a non-cash $5.2 million cumulative revenue reduction to correct an error related to energy and commodity analytics revenues previously reported prior to January 1, 2012. MSCI's previous policy had resulted in the immediate recognition of a substantial portion of the revenue related to a majority of its contracts rather than amortizing that revenue over the life of that contract, which is now the method of recognition.

Table 6: Quarterly Operating Expense Detail (unaudited)
		Three Months Ended									% Change from
		December 31,			December 31,			September 30,			December 31,			September 30,
In thousands		2013			2012			2013			2012			2013
Cost of services
Compensation		$	62,057		$	55,982		$	58,751		10.9	%		5.6	%
Non-recurring stock based compensation			-			255			-		n/m			n/m
Total compensation		$	62,057		$	56,237		$	58,751		10.3	%		5.6	%
Non-compensation			22,670			17,735			21,289		27.8	%		6.5	%
Lease exit charge1			-			219			-		n/m			n/m
Total non-compensation			22,670			17,954			21,289		26.3	%		6.5	%
Total cost of services		$	84,727		$	74,191		$	80,040		14.2	%		5.9	%
Selling, general and administrative
Compensation		$	45,904		$	37,475		$	44,495		22.5	%		3.2	%
Non-recurring stock based compensation			-			126			-		n/m			n/m
Total compensation		$	45,904		$	37,601		$	44,495		22.1	%		3.2	%
Non-compensation			22,997			19,321			20,885		19.0	%		10.1	%
Strategic review expenses2			1,821			-			-		n/m			n/m
Lease exit charge1			-			250			-		n/m			n/m
Total non-compensation			24,818			19,571			20,885		26.8	%		18.8	%
Total selling, general and administrative		$	70,722		$	57,172		$	65,380		23.7	%		8.2	%
Restructuring costs			-			-			-		n/m			n/m
Amortization of intangible assets			14,760			15,421			14,448		(4.3	%)		2.2	%
Depreciation and amortization of property, equipment and leasehold improvements			6,042			4,989			5,934		21.1	%		1.8	%
Total operating expenses		$	176,251		$	151,773		$	165,802		16.1	%		6.3	%
Compensation		$	107,961		$	93,457		$	103,246		15.5	%		4.6	%
Non-recurring stock-based compensation			-			381			-		n/m			n/m
Total compensation		$	107,961		$	93,838		$	103,246		15.1	%		4.6	%
Non-compensation expenses			45,667			37,056			42,174		23.2	%		8.3	%
Strategic review expenses2			1,821			-			-		n/m			n/m
Lease exit charge1			-			469			-		n/m			n/m
Total non-compensation			47,488			37,525			42,174		26.6	%		12.6	%
Restructuring costs			-			-			-		n/m			n/m
Amortization of intangible assets			14,760			15,421			14,448		(4.3	%)		2.2	%
Depreciation and amortization of property, equipment and leasehold improvements			6,042			4,989			5,934		21.1	%		1.8	%
Total operating expenses		$	176,251		$	151,773		$	165,802		16.1	%		6.3	%

n/m = not meaningful
1 Fourth quarter 2012 included charges of $0.5 million, associated with an occupancy lease exit charge resulting from the consolidation of MSCI's New York offices.
2 Fourth quarter 2013 included charges of $1.8 million associated with the previously announced decision to explore strategic alternatives for MSCI's Governance segment.

Table 7: Full Year Operating Expense Detail (unaudited)
			Year Ended								% Change from
			December 31,				December 31,				December 31,
In thousands				2013				2012			2012
Cost of services
Compensation			$	243,725			$	215,134			13.3	%
Non-recurring stock based compensation				-				884			(100.0	%)
Total compensation			$	243,725			$	216,018			12.8	%
Non-compensation				84,729				70,314			20.5	%
Lease exit charge1				(143	)			1,743			n/m
Total non-compensation				84,586				72,057			17.4	%
Total cost of services			$	328,311			$	288,075			14.0	%
Selling, general and administrative
Compensation			$	175,945			$	156,288			12.6	%
Non-recurring stock based compensation				-				897			(100.0	%)
Total compensation			$	175,945			$	157,185			11.9	%
Non-compensation				77,801				73,945			5.2	%
Strategic review expenses2				1,821				-			n/m
Lease exit charge1				(222	)			2,053			n/m
Total non-compensation				79,400				75,998			4.5	%
Total selling, general and administrative			$	255,345			$	233,183			9.5	%
Restructuring costs				-				(51	)		(100.0	%)
Amortization of intangible assets				58,203				63,298			(8.0	%)
Depreciation and amortization of property,
equipment and leasehold improvements				22,302				18,700			19.3	%
Total operating expenses			$	664,161			$	603,205			10.1	%
Compensation			$	419,670			$	371,422			13.0	%
Non-recurring stock-based compensation				-				1,781			(100.0	%)
Total compensation			$	419,670			$	373,203			12.5	%
Non-compensation expenses				162,530				144,259			12.7	%
Strategic review expenses2				1,821				-			n/m
Lease exit charge1				(365	)			3,796			n/m
Total non-compensation				163,986				148,055			10.8	%
Restructuring costs				-				(51	)		(100.0	%)
Amortization of intangible assets				58,203				63,298			(8.0	%)
Depreciation and amortization of property,
equipment and leasehold improvements				22,302				18,700			19.3	%
Total operating expenses			$	664,161			$	603,205			10.1	%

n/m = not meaningful
1 Years ended 2013 and 2012 included a benefit of $0.4 million and a charge of $3.8 million, respectively, associated with an occupancy lease exit resulting from the consolidation of MSCI's New York offices.
2 Full year 2013 included charges of $1.8 million associated with the previously announced decision to explore strategic alternatives for MSCI's Governance segment.

Table 8: Summary Quarterly Segment Information (unaudited)
			Three Months Ended												% Change from
			December 31,				December 31,				September 30,				December 31,			September 30,
In thousands				2013				2012				2013			2012			2013
Revenues:
Performance and Risk			$	236,864			$	215,936			$	228,608			9.7	%		3.6	%
Governance				30,758				31,144				29,630			(1.2	%)		3.8	%
Total Operating revenues			$	267,622			$	247,080			$	258,238			8.3	%		3.6	%
Operating Income:
Performance and Risk				88,055				90,620				88,172			(2.8	%)		(0.1	%)
Margin				37.2	%			42.0	%			38.6	%
Governance				3,316				4,687				4,264			(29.3	%)		(22.2	%)
Margin				10.8	%			15.0	%			14.4	%
Total Operating Income			$	91,371			$	95,307			$	92,436			-4.1	%		(1.2	%)
Margin				34.1	%			38.6	%			35.8	%
Adjusted EBITDA:
Performance and Risk				104,298				107,502				104,210			(3.0	%)		0.1	%
Margin				44.0	%			49.8	%			45.6	%
Governance				9,696				9,065				8,608			7.0	%		12.6	%
Margin				31.5	%			29.1	%			29.1	%
Total Adjusted EBITDA			$	113,994			$	116,567			$	112,818			(2.2	%)		1.0	%
Margin				42.6	%			47.2	%			43.7	%

Table 9: Summary Full Year Segment Information (unaudited)
		Year Ended								% Change from
		December 31,				December 31,				December 31,
In thousands			2013				2012			2012
Revenues:
Performance and Risk		$	913,364			$	826,990			10.4	%
Governance			122,303				123,151			(0.7	%)
Total Operating revenues		$	1,035,667			$	950,141			9.0	%
Operating Income:
Performance and Risk			356,500				334,547			6.6	%
Margin			39.0	%			40.5	%
Governance			15,006				12,389			21.1	%
Margin			12.3	%			10.1	%
Total Operating Income		$	371,506			$	346,936			7.1	%
Margin			35.9	%			36.5	%
Adjusted EBITDA:
Performance and Risk			419,278				404,644			3.6	%
Margin			45.9	%			48.9	%
Governance			34,189				29,816			14.7	%
Margin			28.0	%			24.2	%
Total Adjusted EBITDA		$	453,467			$	434,460			4.4	%
Margin			43.8	%			45.7	%

Table 10: Key Operating Metrics (unaudited)
		As of												% Change from
		December 31,				December 31,				September 30,				December 31,			September 30,
Dollars in thousands			2013				2012			2013				2012			2013
Run Rates1
Index and ESG products
Subscription		$	371,511			$	338,006			$	360,042			9.9	%		3.2	%
Asset-based fees			158,305				127,072				146,979			24.6	%		7.7	%
Index and ESG products total			529,816				465,078				507,021			13.9	%		4.5	%
Risk management analytics			290,655				262,108				288,452			10.9	%		0.8	%
Portfolio management analytics			103,125				109,836				104,938			(6.1	%)		(1.7	%)
Energy and commodity analytics			11,302				13,128				12,493			(13.9	%)		(9.5	%)
Total Performance and Risk			934,898				850,150				912,904			10.0	%		2.4	%
Governance			115,482				117,261				112,911			(1.5	%)		2.3	%
Total Run Rate		$	1,050,380			$	967,411			$	1,025,815			8.6	%		2.4	%
Subscription total		$	892,075			$	840,339			$	878,836			6.2	%		1.5	%
Asset-based fees total			158,305				127,072				146,979			24.6	%		7.7	%
Total Run Rate		$	1,050,380			$	967,411			$	1,025,815			8.6	%		2.4	%
New Recurring Subscription Sales		$	36,145			$	29,742			$	30,157			21.5	%		19.9	%
Subscription Cancellations			(23,756	)			(28,725	)			(16,458	)		(17.3	%)		44.3	%
Net New Recurring Subscription Sales		$	12,389			$	1,017			$	13,699			1,118.2	%		(9.6	%)
Non-recurring sales		$	7,157			$	7,443			$	4,359			(3.8	%)		64.2	%
Employees			3,261				2,759				3,123			18.2	%		4.4	%
% Employees by location
Developed Market Centers			53	%			59	%			55	%
Emerging Market Centers			47	%			41	%			45	%

1 The Run Rate at a particular point in time represents the forward-looking revenues for the next 12 months from all subscriptions and investment product licenses we currently 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 an annualization of the most recent periodic fee earned under such license or subscription. The December 31, 2012 Run Rate for IPD products was approximated using the trailing 12 months of revenues primarily adjusted for estimates for non-recurring sales, new sales and cancellations. 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 11: ETF Assets Linked to MSCI Indexes1 (unaudited)
		Three Months Ended 2012													Three Months Ended 2013														Year Ended
In Billions		March			June				September			December			March				June				September			December			December 2012			December 2013
Beginning Period AUM in ETFs linked to MSCI Indexes		$	301.6		$	354.7			$	327.4		$	363.7		$	402.3			$	357.3			$	269.7		$	302.6		$	301.6		$	402.3
Cash Inflow/Outflow2			15.2			0.3				15.2			25.9			(61.0	)			(74.4	)			12.7			19.4			56.6			(103.3	)
Appreciation/Depreciation			37.9			(27.6	)			21.1			12.7			16.0				(13.2	)			20.2			10.9			44.1			33.9
Period End AUM in ETFs linked to MSCI Indexes		$	354.7		$	327.4			$	363.7		$	402.3		$	357.3			$	269.7			$	302.6		$	332.9		$	402.3		$	332.9
Period Average AUM in ETFs linked to MSCI Indexes		$	341.0		$	331.6			$	344.7		$	376.6		$	369.0			$	324.1			$	286.2		$	321.5		$	349.1		$	325.0

1 ETF assets under management calculation methodology is ETF net asset value multiplied by shares outstanding. Source: Bloomberg and MSCI

2 Cash Inflow/Outflow for the first and second quarter of 2013 includes the migration of $82.8 billion of AUM in 9 Vanguard ETFs and $74.8 billion of AUM in 13 Vanguard ETFs, respectively, that transitioned to other indexes during each quarter.

Table 12: Supplemental Operating Metrics (unaudited)
			Sales & Cancellations
			Three Months Ended 2012																Three Months Ended 2013																Year Ended
In thousands			March				June				September				December				March				June				September				December				December 2012				December 2013
New Recurring Subscription Sales			$	33,506			$	28,453			$	27,164			$	29,742			$	30,928			$	31,133			$	30,157			$	36,145			$	118,865			$	128,363
Subscription Cancellations				(13,498	)			(17,229	)			(19,134	)			(28,725	)			(16,691	)			(16,082	)			(16,458	)			(23,756	)			(78,586	)			(72,987	)
Net New Recurring Subscription Sales			$	20,008			$	11,224			$	8,030			$	1,017			$	14,237			$	15,051			$	13,699			$	12,389			$	40,279			$	55,376
Non-recurring sales				9,338				5,099				3,878				7,443				8,935				6,664				4,359				7,157				25,758				27,115
Total Sales			$	42,844			$	33,552			$	31,042			$	37,185			$	39,863			$	37,797			$	34,516			$	43,302			$	144,623			$	155,478
			Aggregate & Core Retention Rates
			Three Months Ended 2012																Three Months Ended 2013																Year Ended
			March				June				September				December				March				June				September				December				December 2012				December 2013
Aggregate Retention Rate1
Index and ESG products				94.5	%			94.9	%			94.0	%			90.4	%			95.0	%			94.0	%			94.7	%			90.7	%			93.4	%			93.6	%
Risk management analytics				93.9	%			90.0	%			88.5	%			84.4	%			93.5	%			92.5	%			92.3	%			87.2	%			89.0	%			91.4	%
Portfolio management analytics				91.9	%			84.2	%			84.9	%			78.0	%			81.7	%			87.0	%			89.1	%			88.9	%			84.7	%			86.7	%
Energy & commodity analytics				90.2	%			85.5	%			76.6	%			60.4	%			90.1	%			86.0	%			80.2	%			54.5	%			78.1	%			77.7	%
Total Performance and Risk				93.7	%			90.9	%			89.8	%			85.2	%			92.4	%			92.3	%			92.7	%			88.5	%			89.8	%			91.5	%
Total Governance				88.7	%			92.1	%			91.1	%			83.6	%			90.0	%			92.9	%			88.5	%			90.1	%			88.9	%			90.4	%
Total Aggregate Retention Rate				93.0	%			91.0	%			90.0	%			84.9	%			92.1	%			92.3	%			92.2	%			88.7	%			89.7	%			91.3	%
Core Retention Rate1
Index and ESG products				94.6	%			95.0	%			94.0	%			90.5	%			95.0	%			94.1	%			94.8	%			90.9	%			93.5	%			93.7	%
Risk management analytics				94.0	%			92.0	%			89.3	%			84.4	%			93.9	%			93.1	%			92.3	%			87.3	%			89.8	%			91.6	%
Portfolio management analytics				92.2	%			87.0	%			86.5	%			83.6	%			82.8	%			87.5	%			90.3	%			90.1	%			87.3	%			87.7	%
Energy & commodity analytics				90.7	%			85.5	%			77.1	%			60.4	%			90.1	%			86.0	%			80.2	%			54.5	%			78.4	%			77.7	%
Total Performance and Risk				93.8	%			92.2	%			90.5	%			86.2	%			92.7	%			92.6	%			92.9	%			88.8	%			90.6	%			91.8	%
Total Governance				88.7	%			92.2	%			91.2	%			83.8	%			90.2	%			92.9	%			88.5	%			90.1	%			89.0	%			90.4	%
Total Core Retention Rate				93.1	%			92.2	%			90.6	%			85.9	%			92.4	%			92.6	%			92.4	%			89.0	%			90.4	%			91.6	%

1 The Aggregate Retention Rates are calculated by annualizing the cancellations for which we have received a notice of termination or non-renewal during the quarter and we have 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. 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 Retention Rate for the quarter. 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. For the calculation of the Core Retention Rates the same methodology is used except the amount of cancellations in the quarter is reduced by the amount of product swaps.

Table 13: Reconciliation of Adjusted EBITDA to Net Income (unaudited)
			Three Months Ended December 31, 2013												Three Months Ended December 31, 2012
In thousands			Performance and Risk				Governance				Total				Performance and Risk				Governance				Total
Net Income											$	47,257											$	54,452
Plus:	Provision for income taxes											37,307												33,863
Plus:	Other expense (income), net											6,807												6,992
Operating income			$	88,055			$	3,316			$	91,371			$	90,620			$	4,687			$	95,307
Plus:	Non-recurring stock-based compensation			-				-				-				342				39				381
Plus:	Depreciation and amortization of property,
	equipment and leasehold improvements			5,025				1,017				6,042				4,028				961				4,989
Plus:	Amortization of intangible assets			11,218				3,542				14,760				12,101				3,320				15,421
Plus:	Strategic review expenses			-				1,821				1,821				-				-				-
Plus:	Lease exit charge			-				-				-				411				58				469
Plus:	Restructuring costs			-				-				-				-				-				-
Adjusted EBITDA			$	104,298			$	9,696			$	113,994			$	107,502			$	9,065			$	116,567
			Year Ended December 31, 2013												Year Ended December 31, 2012
In thousands			Performance and Risk				Governance				Total				Performance and Risk				Governance				Total
Net Income											$	222,557											$	184,238
Plus:	Provision for income taxes											123,064												105,171
Plus:	Other expense (income), net											25,885												57,527
Operating income			$	356,500			$	15,006			$	371,506			$	334,547			$	12,389			$	346,936
Plus:	Non-recurring stock-based compensation			-				-				-				1,611				170				1,781
Plus:	Depreciation and amortization of property,
	equipment and leasehold improvements			18,288				4,014				22,302				15,165				3,535				18,700
Plus:	Amortization of intangible assets			44,798				13,405				58,203				50,017				13,281				63,298
Plus:	Strategic review expenses			-				1,821				1,821				-				-				-
Plus:	Lease exit charge			(308	)			(57	)			(365	)			3,336				460				3,796
Plus:	Restructuring costs			-				-				-				(32	)			(19	)			(51	)
Adjusted EBITDA			$	419,278			$	34,189			$	453,467			$	404,644			$	29,816			$	434,460

Table 14: Reconciliation of Adjusted Net Income and Adjusted EPS to Net Income and EPS (unaudited)
			Three Months Ended												Year Ended
			December 31,				December 31,				September 30,				December 31,				December 31,
In thousands, except per share data				2013				2012				2013				2013				2012
Net Income			$	47,257			$	54,452			$	55,310			$	222,557			$	184,238
Plus:	Non-recurring stock-based compensation			-				381				-				-				1,781
Plus:	Amortization of intangible assets			14,760				15,421				14,448				58,203				63,298
Plus:	Debt repayment and refinancing expenses			1,405				-				-				1,405				20,639
Plus:	Strategic review expenses			1,821				-				-				1,821				-
Plus:	Lease exit charge			-				469				-				(365	)			3,796
Plus:	Restructuring costs			-				-				-				-				(51	)
Less:	Income tax effect			(7,591	)			(6,556	)			(5,172	)			(21,742	)			(32,510	)
Adjusted net income			$	57,652			$	64,167			$	64,586			$	261,879			$	241,191
Diluted EPS			$	0.39			$	0.44			$	0.46			$	1.83			$	1.48
Plus:	Non-recurring stock-based compensation			-				-				-				-				0.01
Plus:	Amortization of intangible assets			0.12				0.12				0.12				0.48				0.51
Plus:	Debt repayment and refinancing expenses			0.01				-				-				0.01				0.17
Plus:	Strategic review expenses			0.02				-				-				0.01				-
Plus:	Lease exit charge			-				-				-				-				0.03
Plus:	Restructuring costs			-				-				-				-				-
Less:	Income tax effect			(0.06	)			(0.04	)			(0.05	)			(0.17	)			(0.26	)
Adjusted EPS			$	0.48			$	0.52			$	0.53			$	2.16			$	1.94

MSCI Inc.
W. Edings Thibault, MSCI, New York + 1.212.804.5273
or
Media Inquiries:
Jo Morgan, MSCI, London + 44.20.7618.2224
W. Edings Thibault, MSCI, New York + 1.212.804.5273
Sally Todd | Christian Pickel, MHP Communications, London + 44.20.3128.8100

Source: MSCI Inc.

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