msci-10q_20210630.htm

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

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

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

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

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

As of July 20, 2021, there were 82,442,291 shares of the registrant’s common stock, par value $0.01, outstanding.

Our corporate headquarters is located at 7 World Trade Center, 250 Greenwich Street, 49th Floor, New York, New York, 10007, and our telephone number is (212) 804-3900. We maintain a website on the internet at www.msci.com. The contents of our website are not a part of or incorporated by reference in this Quarterly Report on Form 10-Q.

We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). The SEC maintains a website that contains reports, proxy and information statements and other information that we file electronically with the SEC at www.sec.gov. We also make available free of charge, on or through our website, these reports, proxy statements and other information as soon as reasonably practicable following the time they are electronically filed with or furnished to the SEC. To access these, click on the “SEC Filings” link found on our Investor Relations homepage (http://ir.msci.com).

We also use our Investor Relations homepage, Corporate Responsibility homepage 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 us when you enroll your email address by visiting the “Email Alert Subscription” section of our Investor Relations homepage at http://ir.msci.com/alerts.cfm. The contents of our website, including our Investor Relations homepage, Corporate Responsibility homepage and social media channels are not, however, a part of or incorporated by reference in this Quarterly Report on Form 10-Q.

We have included in this Quarterly Report on Form 10-Q, and from time to time may make in our public filings, press releases or other public statements, certain statements that constitute forward-looking statements. In addition, our management may make forward-looking statements to analysts, investors, representatives of the media and others. These forward-looking statements are not historical facts and represent only MSCI’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and beyond our control.

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. Statements concerning our financial position, business strategy and plans or objectives for future operations are forward-looking statements. 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. Such risks and uncertainties include those set forth under “Risk Factors” in Part I, Item 1A of the 2020 Annual Report on Form 10-K filed with the SEC on February 12, 2021. Other factors that could materially affect actual results, levels of activity, performance or achievements can be found in quarterly reports on Form 10-Q and current reports on Form 8-K filed or furnished with the SEC. The forward-looking statements in this report speak only as of the time they are made and do not necessarily reflect our outlook at any other point in time. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or for any other reason. Therefore, readers should carefully review the risk factors set forth in other reports or documents we file from time to time with the SEC.

	As of
	June 30,			December 31,
	2021			2020
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,972,002		$	1,300,521
Accounts receivable, net of allowances		488,570			558,569
Prepaid income taxes		57,638			20,097
Prepaid and other assets		40,333			46,411
Total current assets		2,558,543			1,925,598
Property, equipment and leasehold improvements, net		71,432			80,446
Right of use assets		146,070			153,330
Goodwill		1,566,612			1,566,022
Intangible assets, net		208,473			234,748
Equity method investment		187,452			190,898
Deferred tax assets		27,696			23,627
Other non-current assets		24,798			23,978
Total assets	$	4,791,076		$	4,198,647

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	11,253		$	14,253
Income taxes payable		32,308			26,195
Accrued compensation and related benefits		109,205			161,557
Other accrued liabilities		135,738			143,894
Deferred revenue		662,168			675,870
Total current liabilities		950,672			1,021,769
Long-term debt		3,963,622			3,366,777
Long-term operating lease liabilities		145,285			152,342
Deferred tax liabilities		8,347			12,774
Other non-current liabilities		90,957			88,219
Total liabilities		5,158,883			4,641,881

Commitments and Contingencies (see Note 7)

Shareholders' equity (deficit):
Preferred stock (par value $0.01, 100,000,000 shares authorized; no shares issued)		—			—
Common stock (par value $0.01; 750,000,000 common shares authorized; 133,142,605 and 132,829,175 common shares issued and 82,437,837 and 82,573,407 common shares outstanding at June 30, 2021 and December 31, 2020, respectively)		1,331			1,328
Treasury shares, at cost (50,704,768 and 50,255,768 common shares held at June 30, 2021 and December 31, 2020, respectively)		(4,529,573	)		(4,342,535	)
Additional paid in capital		1,433,717			1,402,537
Retained earnings		2,785,727			2,554,295
Accumulated other comprehensive loss		(59,009	)		(58,859	)
Total shareholders' equity (deficit)		(367,807	)		(443,234	)
Total liabilities and shareholders' equity (deficit)	$	4,791,076		$	4,198,647

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
	(unaudited)
Operating revenues	$	498,180		$	409,616		$	976,603		$	826,396

Operating expenses:
Cost of revenues		87,327			70,456			173,107			145,065
Selling and marketing		58,191			51,617			114,658			107,166
Research and development		27,531			22,534			52,393			49,096
General and administrative		30,182			28,309			64,910			59,142
Amortization of intangible assets		30,396			14,062			45,464			27,838
Depreciation and amortization of property, equipment and leasehold improvements		7,020			7,463			14,163			15,030
Total operating expenses		240,647			194,441			464,695			403,337

Operating income		257,533			215,175			511,908			423,059

Interest income		(347	)		(771	)		(733	)		(4,254	)
Interest expense		39,557			41,227			77,141			81,458
Other expense (income)		22,628			35,552			23,777			43,839

Other expense (income), net		61,838			76,008			100,185			121,043

Income before provision for income taxes		195,695			139,167			411,723			302,016
Provision for income taxes		30,272			24,044			49,481			38,768
Net income	$	165,423		$	115,123		$	362,242		$	263,248

Earnings per basic common share	$	2.01		$	1.38		$	4.39		$	3.12

Earnings per diluted common share	$	1.99		$	1.36		$	4.34		$	3.10

Weighted average shares outstanding used in computing earnings per share
Basic		82,454			83,666			82,546			84,268
Diluted		83,295			84,349			83,393			84,948

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
	(unaudited)
Net income	$	165,423		$	115,123		$	362,242		$	263,248
Other comprehensive (loss) income:
Foreign currency translation adjustments		879			1,562			(826	)		(10,801	)
Income tax effect		(35	)		(379	)		577			2,089
Foreign currency translation adjustments, net		844			1,183			(249	)		(8,712	)

Pension and other post-retirement adjustments		(59	)		(88	)		197			218
Income tax effect		22			41			(98	)		5
Pension and other post-retirement adjustments, net		(37	)		(47	)		99			223
Other comprehensive (loss) income, net of tax		807			1,136			(150	)		(8,489	)
Comprehensive income	$	166,230		$	116,259		$	362,092		$	254,759

											Accumulated
						Additional					Other
	Common		Treasury			Paid in		Retained			Comprehensive
	Stock		Stock			Capital		Earnings			Income (Loss)			Total
	(unaudited)
Balance at December 31, 2020	$	1,328	$	(4,342,535	)	$	1,402,537	$	2,554,295		$	(58,859	)	$	(443,234	)
Net income									196,819						196,819
Dividends declared ($0.78 per common share)									(65,947	)					(65,947	)
Dividends paid in shares							66								66
Other comprehensive income (loss), net of tax												(957	)		(957	)
Common stock issued		3													3
Shares withheld for tax withholding and exercises				(52,814	)										(52,814	)
Compensation payable in common stock							18,842								18,842
Common stock repurchased and held in treasury				(134,340	)										(134,340	)
Common stock issued to Directors and (held in)/released from treasury				(20	)										(20	)

Balance at March 31, 2021		1,331		(4,529,709	)		1,421,445		2,685,167			(59,816	)		(481,582	)
Net income									165,423						165,423
Dividends declared ($0.78 per common share)									(64,863	)					(64,863	)
Dividends paid in shares							20								20
Other comprehensive income (loss), net of tax												807			807
Common stock issued															—
Shares withheld for tax withholding and exercises				(620	)										(620	)
Compensation payable in common stock							12,252								12,252
Common stock repurchased and held in treasury															—
Common stock issued to Directors and (held in)/released from treasury				756											756
Balance at June 30, 2021	$	1,331	$	(4,529,573	)	$	1,433,717	$	2,785,727		$	(59,009	)	$	(367,807	)

Balance at December 31, 2019	$	1,324	$	(3,565,784	)	$	1,351,031	$	2,199,294		$	(62,579	)	$	(76,714	)
Net income									148,125						148,125
Cumulative-effect adjustment									631						631
Dividends declared ($0.68 per common share)

Delaware		13-4038723
(State or other jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

7 World Trade Center 250 Greenwich Street, 49^th Floor New York, New York		10007
(Address of Principal Executive Offices)		(Zip Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01 per share		MSCI		New York Stock Exchange

		Page
	Part I – Financial Information
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	40

	Part II – Other Information
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 6.	Exhibits	42


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


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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐